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Nov. 27, 2020, 12:59 a.m. EST

Walt Disney to lay off 32,000 as virus hits parks

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By Clarence Leong

Walt Disney Co. is planning to layoff 32,000 employees, primarily at its theme parks, as the coronavirus continues to hit the entertainment company's businesses hard.

Disney announced 28,000 job cuts in September and it expects to terminate its employees' contracts in the first half of fiscal 2021.

The company warned that it could take additional measures such as not declaring future dividends and either reducing or not making certain payments, such as contributions to its pension and postretirement medical plans.

The Covid-19 pandemic has severely affected many companies globally, as government lockdowns to restrict the spread of the virus have led to the closure of leisure parks, cruise ships and movie halls. The U.S. is among the worst hit by the pandemic and it is unclear when the company will be able to reopen its Disneyland theme park in Anaheim, Calif. that has been closed since March.

In a filing late Wednesday, Disney said it was considering additional measures such as 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.

Disney announced earlier this month a second consecutive quarterly loss as the pandemic hit its core businesses like theme parks and movie distribution. However, the company's direct-to-consumer business has emerged as a bright spot: Subscriptions to Disney+ hit 73.7 million as of Oct. 3, up from more than 60 million reported in August.

The growth of Disney+ has prompted Disney to shift even more focus to its streaming efforts. The early success and potential growth of its streaming services has been encouraging to Wall Street, where Disney's share price has returned to pre-pandemic levels as subscriber numbers grow.

The company said it also plans to launch a general entertainment direct-to-consumer 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 P.R. Venkat at venkat.pr@wsj.com

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