Disney plans to lay off 28,000 employees as coronavirus continues to affect its theme park business

In a Tuesday memo sent to employees, Disney said it will lay off 28,000 employees across its theme parks. This is as a result of prolonged closures at Disney’s California-based them parks and limited attendance at its other parks.

They lay off comes as Disney has exhausted its options from cutting operations to furloughing some employees due to impacts of the coronavirus on the business. Although its streaming service and Disney channels have shown profitable results due to stay home and movement restriction orders, other key parts of the business greatly suffer.

“Earlier this year, in response to the pandemic, we were forced to close our businesses around the world. Few of us could have imagined how significantly the pandemic would impact us—both at work and in our daily lives,” the memo read.”

Last year, the parks and consumer products segment of Disney’s business accounted for 37% of the company’s total revenue of $69.6 billion. This segment is a key part of the company’s business.

“We initially hoped that this situation would be short-lived and that we would recover quickly and return to normal. Seven months later, we find that has not been the case. And, as a result, today we are now forced to reduce the size of our team across executive, salaried, and hourly roles.”

After market close on Tuesday shares of Disney fell less than 2%.

The company will lay off employees across its parks experiences and consumer product division, according to the company. Disney head of parks Josh D’Amaro listed several “difficult decisions” the company was forced to make due to the impact of the coronavirus on its business, including furloughing thousands of employees.

“As you can imagine, a decision of this magnitude is not easy,” said D’Amaro in the memo. “For the last several months, our management team has worked tirelessly to avoid having to separate anyone from the company. We’ve cut expenses, suspended capital projects, furloughed our cast members while still paying benefits, and modified our operation to run as efficiently as possible, however, we simply cannot responsibly stay fully staffed while operating at such limited capacity.”

Since the wake of the coronavirus pandemic, Disney has hemorrhaged money. In its second-quarter report, Disney saw a loss of $1 billion in operating income with respect to the closing of its parks, hotels, and cruise business. By the next quarter, the company fell even deeper to a loss of $3.5 billion.

The Disney park team has been in close talks with California state legislators to provide coronavirus prevention guidelines for reopening the parks. Last week, Disney provided a media update on the success it has seen in its reopened parks in Florida, as well as Japan, Shanghai, and Paris.

The update showed that Disney has successfully implemented coronavirus safety measures and ensured that visitors abide by them. The safety measures include wearing face masks, sanitation stations, mobile ordering for meals, and cashless pay.