- Share this article on Facebook
- Share this article on Twitter
- Share this article on Email
- Show additional share options
- Share this article on Print
- Share this article on Comment
- Share this article on Whatsapp
- Share this article on Linkedin
- Share this article on Reddit
- Share this article on Pinit
- Share this article on Tumblr
Sen. Elizabeth Warren on Monday penned a letter to Walt Disney Co. CEO Bob Chapek and chairman Bob Iger concerning the recent theme park layoffs the company made, which officials largely blamed on California for not allowing Disneyland to reopen.
The Parks division of the conglomerate announced on Sept. 29 that 28,000 employees would be laid off, a lion’s share from Disneyland, but also some from Florida’s Walt Disney World, which reopened in phases back in July.
In her letter, the Massachusetts Democrat cited news stories about Disney executives having their pay restored to full just before the layoffs were announced. Due to the pandemic, Disney said in late March there would be pay reductions among the top tier of its brass, which included Chapek and Iger.
“In the years leading up to this crisis, your company prioritized the enrichment of executives and stockholders through hefty compensation packages, and billions of dollars’ worth of dividend payments and stock buybacks, all of which weakened Disney’s financial cushion and ability to retain and pay its front-line workers amid the pandemic,” Warren wrote, footnoting several news stories.
The Disney board of directors elected not to declare a dividend in July 2020 with respect to the first half of the fiscal year. The last time a dividend was declared was December 2019, months before a pandemic was declared.
“While I appreciate that your company has continued to provide health-care benefits to furloughed workers for the past six months, thousands of laid-off employees will now have to worry about how to keep food on the table as executives begin receiving hefty paychecks again,” Warren wrote. “I would like to know whether Disney’s financial decisions have impacted the company’s decision to lay off workers and whether your company plans to extend health care or other critical benefits and protections to laid-off employees.”
On Sept. 22, Josh D’Amaro, chairman of Disney Parks, Experiences & Products, essentially demanded that Gov. Gavin Newsom and the state issue guidance so Disneyland could reopen immediately after being shuttered since mid- March. D’Amaro warned of the ramifications sans action — a week later, the layoffs were announced and Iger resigned from the state’s coronavirus economic task force.
Newsom has still not budged, saying last week that he was in “no hurry” to allow theme parks to reopen. However, after he was blasted for being “unreasonable” by California Attractions & Parks Association and Disney, Newsom said Monday he was sending a team of his staff to Disney World to report back how they felt that theme park was operating with new health and safety measures in place.
In her letter, Warren tells Iger and Chapek that the explanation to layoff employees, “fails to acknowledge Disney’s short-sighted business decisions that reduced its capital, including spending billions of dollars to repurchase its own shares over the last decade, (2) rewarding its shareholders through billions of dollars in dividend payments, and (3) showering its top company executives with over-the-top compensation packages and salaries — which reportedly were restored several weeks before the September layoff announcement. Disney has spent tens of billions of dollars on share buybacks in recent years, spending $47.9 billion repurchasing its own common stock from 2009-2018 – a practice that is known to turn excess company cash into higher stock prices for the benefit of shareholders.”
Disney responded to Warren’s “misinformed” letter Tuesday afternoon.
“Senator Warren’s misinformed letter contains a number of inaccuracies. We’ve unequivocally demonstrated our ability to operate responsibly with strict health and safety protocols in place at all of our theme parks worldwide, with the exception of Disneyland Resort in California, where the State has prevented us from reopening even though we have reached agreements with unions representing the majority of our Cast Members that would get them back to work,” said a Disney spokesman in a statement.
Toward the end of the five-page letter, Warren asks a number of questions she writes she wants answers to by Oct. 27, which includes, “Which types of Disney employees will be laid off per Mr. D’Amaro’s September 29, 2020 memo?; What was the anticipated monthly total cost of wages for these employees?’ Do any of these employees have recall rights? If so, will these individuals retain their seniority if rehired by Disney?; How were decisions made with regard to which employees would be laid off?; What is the total value of stock buybacks made by Disney in each quarter starting in FY 2016?; To what extent did this increase the stock’s value, and to what extent did it benefit top executives and members of the Board?; How much has Disney paid its shareholders in dividends in each year since 2017?; To what extent did this benefit top executives and members of the Board?”
Read the entire letter here.
1:06 p.m.: Updated with a statement from Disney.
Sign up for THR news straight to your inbox every day