Disney to stop paying 100k employees as cost-saving measure: report

Disney will stop paying 100,000 employees this week as a cost-saving measure during the pandemic, the Financial Times reported Sunday. 

The largest entertainment company in the world expects to save $500 million a month as its parks and hotels have been shut down in Europe and the U.S. for nearly five weeks. Disney has taken more extreme cost-saving measures than its competitors NBCUniversal and Warner Media. 

Disney staff will have to depend on state benefits for support as the company keeps executive bonus schemes and a $1.5 billion dividend payment, the Times reported. The company will give full healthcare benefits to staff on unpaid leave. 

Last year, Disney made $7 billion from its parks, experiences and products, amounting to almost half of its operating profits. The company’s shares have decreased about a quarter since the coronavirus outbreak began. 

The company told its employees to apply for an extra $600 a week of federal support, available through the third coronavirus stimulus package. 

Most of the 17,000 staff at Disneyland Paris will be put on France’s “partial activity scheme,” meaning the company will stop salary payments. 

Some Disney executives have made salary sacrifices during the outbreak, including Executive Chairman Bob Iger who gave up what’s left of his $3 million salary for the year and CEO Bob Chapek who is forgoing half of his $2.5 million salary. Chapek replaced Iger in the weeks before the parks closed. 

Chapek could potentially earn a bonus “of not less than 300 per cent” of his salary and a long-term incentive award of “not less than” $15 million, according to the Times. 

The Hill has reached out to Disney for comment.

The company originally announced employees would be furloughed starting April 19. Disney World, specifically, was reported to furlough 43,000 union workers, by the Orlando Sentinel on April 12.