Disney leads companies announcing layoffs; big airline job cuts loom

Finance

An employee cleans the grounds behind the closed gates of Disneyland Park on the first day of the closure of Disneyland and Disney California Adventure theme parks, in Anaheim, California, on March 14, 2020.

DAVID MCNEW | AFP | Getty Images

A number of job cuts have been announced in the last 24 hours as companies grapple with the ongoing impact of the coronavirus pandemic.

On Tuesday Disney said it will lay off 28,000 employees across its parks, experiences and consumer products divisions amid prolonged closures at its California-based theme parks as well as limited attendance. According to a statement, 67% of the laid off workers were part-time.

Materials science company Dow said Wednesday that it plans to reduce its global workforce costs by approximately 6%, but did not indicate the number of jobs that will be eliminated. The company said it will take a current-quarter charge of $500 million to $600 million in connection with the restructuring, which will include severance and related benefit costs, among other things.

The energy sector has been among the hardest hit by the pandemic as a near standstill in global travel, as well as implementation of work from home policies led to a drop-off in demand for crude products. With oil prices staying lower for longer, a number of companies have already gone bankrupt. The ones left standing have been implementing widespread cost-cutting measures.

Royal Dutch Shell said Wednesday that it plans to cut between 7,000 and 9,000 jobs by the end of 2022. The company said that about1,500 people have agreed to take voluntary cuts this year. Meanwhile U.S. refiner Marathon Petroleum reportedly began another round of job cuts on Tuesday, according to Reuters.

The airline industry has also been among the hardest hit, and big job cut announcements could come as soon as Thursday. Barring additional federal aid, U.S. airlines are on the verge of shedding more than 30,000 jobs.

The terms of $25 billion in federal payroll support that bars job cuts through Sept. 30 expires Wednesday night, meaning furloughs could start Thursday. Airlines are clamoring for additional aid from lawmakers to preserve jobs through March 31, a proposal that has won bipartisan support in Congress and from the Trump administration, but there isn’t yet a deal on a national coronavirus relief package that could include the aid.

United Airlines and American Airlines make up the lion’s share of the planned 30,000 cuts. The staff reductions could have been deeper but tens of thousands of workers across the industry volunteered for buyouts and leaves of absence, which have helped reduce costs.

In the U.S., the employment picture has been improving since a record 20.5 million jobs were lost in April amid the coronavirus-induced economic shutdown. In August nonfarm payrolls increased by 1.37 million and the unemployment rate tumbled to 8.4%. On Wednesday, an ADP survey showed a gain of 749,000 jobs for private payrolls in September, which was ahead of the 600,000 expected by Dow Jones.

However, while jobs have started to return, unemployment levels remain elevated compared to historical standards, and these latest job cut announcements point to the ongoing and long-lasting consequences of the pandemic.

— CNBC’s Leslie Josephs contributed reporting.

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