DIS-MAY
Disney stops paying 100,000 workers to save $500million a month as theme parks and hotels stay shut in Covid pandemic
DISNEY has stopped paying 100,000 workers in order to save $500million a month after its theme parks and hotels around the world shut down five weeks ago due to the outbreak.
The move has affected more than half the Walt Disney Corporation's workforce.
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The entertainment corporation has parks across the world in countries such as Japan, China, France and has two major theme parks in the US, in California and Florida.
According to the , JPMorgan's Alexia Quadrani estimated that Disney would save $500million per month if they stopped paying 100,000 of their employees.
She said: "With labor accounting for approximately 45 percent of operating expenses and 33 percent of total expenses, we assume notable savings."
The corporation was said to have lost $500million last month after the park and hotel closures.
On average 50.6million tourists visit Disney's main park, in Orlando, Florida every year. The park employs 70,000 people.
The decision to stop paying employees comes as protects a $1.5billion dividend payout due in July of this year.
Also in place are executive bonus schemes and are believed to be worth about 900 times the average $52,000 Disney worker salary.
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Back in February Bob Iger announced he was stepping down as chief executive with parks chairman Bob Chapek named his successor.
But Iger has returned to navigate the crisis which is estimated to be costing the corporation $30 million each day.
As a show of solidarity Iger gave up the remainder of his $3million salary for this year and his replacement Bob Chapek said he'd only take half of his $2.5million base salary.
Back in 2018 Iger got $65.6million in incentives and $46million in 2019.
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Disney bosses are making plans for the parks to reopen in the coming months on the condition that staff and customers undergo temperature checks at the gates.
The Disney Cruise Line - which operates four ships - announced that all new departures would be postponed until at least the end of May.
In the meantime, Disney will continue to cover medical care for unpaid staff.
However, from Sunday employees were encouraged to make use of the state payouts.
Many of the unpaid parks and hotel staff join the estimated 22 million Americans thrown out of work in four weeks - the worst stretch of US job losses on record.
The announcement follows chief executive Bob Chapek saying in March that "Our ability to do good in the world starts with our cast members ... who create magic every day. Our commitment to them will always be our top priority".
Coronavirus numbers throughout the US continue to soar with more than 790,000 positive cases and 42,000 deaths.
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