Walt Disney Co., the world’s largest entertainment company, will be furloughing more than 100,000 employees this week. It was reported Monday that the move makes nearly half its workforce eligible for unemployment while still protecting executive bonuses.
Disney aims to save up to $500 million a month across its theme parks and hotels, which have been shut in Europe and the U.S. for almost five weeks. However, in going a step further than other theme parks and shifting potentially hundreds of millions in payroll burden to the state, Disney is reportedly protecting its executive-bonus schemes and a $1.5 billion dividend payment due in July. The move may signal Disney’s plans for a prolonged shutdown.
Over the past month, Disney has raised debt and signed new credit facilities, leaving the company with about $20 billion in fresh cash to draw upon for a downturn. Disney made nearly $7 billion in operating income from its parks, experiences and products business last year, making up nearly half of all operating profits. Shares in Disney have fallen by a quarter since the outbreak of the virus.
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