The Los Angeles Times has reported that the Walt Disney Co. will stop paying more than 100,000 employees this week, nearly half of its workforce, as the world’s biggest entertainment company tries to weather the coronavirus lockdown.
Suspending pay for thousands of so-called cast members will save Disney 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.
But slashing fixed costs in a more severe way than other theme-park owners, such as NBCUniversal and Warner Media, poses significant risks to the reputation of the century-old empire behind Mickey Mouse.
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The decision leaves Disney staff reliant on state benefits — public support that could run to hundreds of millions of dollars over coming months — even as the company protects executive-bonus schemes and a $1.5-billion dividend payment due in July.
Top Disney executives have made salary sacrifices to “better enable the company to weather the extraordinary business challenges.” Bob Iger, executive chairman, gave up the remainder of his $3-million salary for this year, while Bob Chapek, who recently replaced Iger as chief executive, will forgo half his $2.5-million base salary.
Disney protected incentive schemes, which account for most of the executives’ remuneration. Iger earned $65.6 million in 2018 and $47 million last year, The latest package is more than 900 times that of the median Disney worker’s earnings, which stands at about $52,000.
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