The Walt Disney Co. will start the process of putting some employees on furlough status as of April 19 given that there is “no clear indication” when its theme parks and related businesses will be able to reopen because of the coronavirus pandemic.
Disney said in a statement that furloughed employees will still retain their full healthcare benefits during the furlough period, with all premiums paid by the company.
Disney did not specify the number or types of employees that will be furloughed. It’s expected to include most of the workers at Disneyland and Walt Disney World, which remain shuttered indefinitely. Disneyland in Anaheim, Calif., closed on March 14, and Disney World in Orlando, Fla., has been closed since March 16.
Disney initially planned to close the parks through March 31, but then updated that last week, saying the parks would remain closed indefinitely. The unions that represent Disneyland workers have been pushing for their members to be paid throughout the shutdown.
Three union officials who represent Disneyland workers said that the company has yet to inform them of the furlough, but that a call is scheduled for Friday.
“We don’t have any clarity on how it applies to our members,” said Chris Duarte, president of Workers United Local 50, which represents about 7,600 Disneyland workers. “We only have guaranteed pay through the 18th. Obviously we want that to continue on.”
The furlough is beginning in the parks division, while Disney’s other lines of business are still making their determinations.
The move comes after President Donald Trump signed into law last week a $2 trillion stimulus package that will provide extra unemployment insurance benefits for tens of millions of workers who are facing a sudden loss of income because of coronavirus-related shutdowns.
Disney earlier this week announced that all executives at the VP level and above will take pay cuts of 20%-30%. Disney executive chairman Bob Iger is forgoing the salary portion of his compensation package, while newly appointed CEO Bob Chapek has taken a 50% cut in salary.
The announcement on Thursday came with an explanation on filing for unemployment once the furlough kicks in. Benefits will be augmented by $600 per week due to the stimulus bill.
Disney also said that it would continue to cover tuition payments for furloughed employees who are part of its Aspire higher education program.
Here is Disney’s full statement:
“The COVID-19 pandemic is having a devastating impact on our world with untold suffering and loss, and has required all of us to make sacrifices. Over the last few weeks, mandatory decrees from government officials have shut down a majority of our businesses. Disney employees have received full pay and benefits during this time, and we’ve committed to paying them through April 18, for a total of five additional weeks of compensation.
“However, with no clear indication of when we can restart our businesses, we’re forced to make the difficult decision to take the next step and furlough employees whose jobs aren’t necessary at this time. The furlough process will begin on April 19, and all impacted workers will remain Disney employees through the duration of the furlough period. They will receive full healthcare benefits, plus the cost of employee and company premiums will be paid by Disney, and those enrolled in Disney Aspire will have continued access to the education program. Additionally, employees with available paid time off can elect to use some or all of it at the start of the furlough period and, once furloughed, they are eligible to receive an extra $600 per week in federal compensation through the $2 trillion economic stimulus bill, as well as state unemployment insurance.”