Cinemark Lays Off 17,500 Hourly Employees and Half of Corporate Staff

Cinemark followed up its mid-March temporary closure of its U.S. and Latin America theaters with furloughs of 17,500 hourly workers and half its corporate staff plus other cost cuts.
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Movie-theater chain Cinemark  (CNK) - Get Report said it was laying off more than 17,500 of its hourly theater employees in the U.S., while also furloughing half its corporate employees at 20% of salary with full benefits. 

The other half of corporate staff in the U.S. saw their salaries halved. Cinemark said it is exploring similar actions in its international markets to the extent local laws permit. 

Cinemark shares at last check were 12% higher at $12.08. Year to date, the stock is down more than 60%.

Chief Executive Mark Zoradi has elected to take no salary while other executives voluntarily reduced their salaries by 80% for as long as the theaters remain closed. 

In the meantime, the company says its senior secured notes, along with current cash balances and other cost-reduction measures, will provide Cinemark with enough liquidity to weather the coronavirus pandemic "even if prolonged."

On April 13, Cinemark said it would begin a private offering of $250 million of senior notes due 2025. 

Other cost cuts include halting all nonessential operating and capital spending, like marketing promotions and initiatives, travel and entertainment, and theater enhancements. 

Last month, Cinemark temporarily closed all its theaters in the U.S. and Latin America, effective March 18.

As of March 31, Cinemark had a cash balance of nearly $480 million, which the company says is enough to sustain it, even if its theaters remain closed for the rest of the year.