Disney To Furlough Many Employees Starting April 19

Disney move will affect employees ‘whose jobs aren’t necessary at this time.’
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Walt Disney Co.  (DIS) - Get Report said Thursday it will begin furloughing many employees “whose jobs aren’t necessary at this time,” beginning April 19.

The entertainment and media giant said in a statement “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.”

As of Sept. 28, 2019, the company reported 223,000 employees worldwide, according to an SEC filing.

The furloughed employees will remain on staff. “They will receive full healthcare benefits, plus the cost of employee and company premiums will be paid by Disney,” according to the statement.

See What Is the Difference Between a Furlough and a Layoff?

See more on employee rights during a furlough.

Disney has been paying employees since their theme parks were ordered shut last month to slow the spread of coronavirus. Disney executives moved to reduce or eliminate their salaries earlier this week. 

Disney shares edged lower in after-hours trading. In the regular session the stock gained 2% to $96.97.

Disney's move comes as unemployment is soaring. More than 6.6 million Americans applied for unemployment last week, according to data released Thursday, bringing the two-week total to nearly 10 million as businesses rush to cut expenses in the face of virtually no income.

U.S. stocks shrugged off the record-setting numbers Thursday, with the Dow gaining nearly 500 points, or 2.24%, to 21,413. The S&P 500 rose 2.3% while the Nasdaq Composite index gained 1.7%. 

The surge appeared to be tied to hopes for improvement in global oil markets as President Trump said he'd sought an end to Saudi Arabia's price war with Russia.  The collapse in oil prices has compounded the impact of coronavirus in the U.S. where oil shale producers have been hard hit and at least one bankruptcy filing has already occurred.