By Erich Schwartzel and P.R. Venkat 

Walt Disney Co. plans to lay off a total of 32,000 employees by March, the company said, a further reduction in its workforce that comes as the pandemic hits the entertainment company's theme-park businesses especially hard.

The number of layoffs is about 4,000 more employees than the previously reported 28,000 job cuts announced in September. Most of the job losses will come in the company's theme-park ranks, where thousands of workers have already been furloughed or laid off.

The severe cuts to Disney's theme-park division accentuates a new reality at the company since the pandemic canceled most live entertainment. Once a reliable moneymaker, the Disney theme parks are now either operating at reduced capacity or closed altogether, with one location -- Disneyland in Anaheim, Calif. -- not expected to reopen until at least next year.

That has forced Disney executives to reorganize the company and shift focus toward its year-old streaming service, Disney+. The service's success in finding early subscribers has saved Disney's share price, which is trading at pre-pandemic levels as investors warm to its growth potential. Even with several vaccines in development and possibly available next year, Disney is betting that its growth for the foreseeable future will come in the living room, not at the theme-park turnstile.

The company has allocated more resources to its streaming operations and even shipped some theatrical releases like "Hamilton" and "Mulan" to the platform. Another service, Star, will expand further overseas. A recent company reorganization put streaming at the center of distribution strategy.

In its regulatory filing Wednesday, Disney warned that it could take additional measures in the future such as not declaring future dividends and either reducing or not making certain payments, like contributions to its pension and postretirement medical plans. Disney said that it was suspending capital spending, reducing film and television content investments and implementing additional furloughs.

"Some of these measures may have an adverse impact on our businesses," the company warned.

Earlier this month, Disney announced a second consecutive quarterly loss as the pandemic struck its core businesses such as theme parks and movie distribution. However, the company's direct-to-consumer business has emerged as a bright spot as quarantine life has increased demand for streaming business.

Subscriptions to Disney+ hit 73.7 million as of Oct. 3, up from more than 60 million reported in August.

Disney said it also plans to launch a general entertainment video streaming offering under the Star brand outside the U.S. in 2021.

"With the unknown duration of Covid-19 and yet-to-be-determined timing of the phased reopening of certain businesses, it is not possible to precisely estimate the impact of Covid-19 on our operations in future quarters," the company said.

Write to Erich Schwartzel at erich.schwartzel@wsj.com and P.R. Venkat at venkat.pr@wsj.com

 

(END) Dow Jones Newswires

November 26, 2020 14:23 ET (19:23 GMT)

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