On April 7th, Disney announced that it would shortly begin a layoff process of 7,000 employees across its parks, experiences and products division, which is a stark reminder of how severely the coronavirus pandemic has damaged the entertainment sector. The announcement comes just as the streaming boom from 2020 seems to be at an end.
The pandemic’s effects on companies like Disney were severe, especially considering its parks, experiences and products division accounted for 40% of its 2019 global revenue. With the closure of its parks, movie theaters, and entertainment venues all over the world, the company’s profits rapidly diminished throughout the year.
The decrease in its overall profits caused Disney to make cost-cutting measures, including the release of 4,000 employees back in September 2020, and now the new layoff of 7,000 employees. It’s estimated that over 20,000 employees have been laid off throughout the pandemic.
The streaming boom, however, helped Disney to make up some of its losses as it launched, and had success with, its Disney+ streaming service in 2020. A majority of the world’s population, who were stuck at home due to the pandemic, looked to streaming services for entertainment, which increased Disney+’s user count. Reports say that the company has already surpassed its goal of 100 million subscribers by the end of 2021.
The streaming boom has not been enough to help Disney make up for the loss of its physical entertainment venues, and it’s now clear that Disney is no longer in a position to keep 7,000 employees. Fortunately, Disney is offering severance packages to laid-off employees, which will help to soften the economic blow to those affected.
It seems fair to say that the streaming boom was able to slow the economic disaster that hit the entertainment sector, but in the end, it simply wasn’t enough to keep companies like Disney afloat. This pandemic has drastically changed the way we consume entertainment, and it’s clear that the industry is going to take a long time to recover.