Elizabeth Warren Slams Walt Disney Company Over Park Layoffs And Executive Pay

By Alex Dudok de Wit | 10/15/2020 4:35 pm | Be the First to Comment!

When the Walt Disney Company announced two weeks ago that it would cut 28,000 jobs in its parks and experiences business, it blamed the pandemic in general and the state of California, whose restrictions have kept Disneyland shut, in particular. Senator Elizabeth Warren sees the matter differently: she believes Disney’s corporate priorities may have had something to do with the layoffs.

In a letter released yesterday, Warren condemns Disney for rewarding shareholders and executives at the expense of its employees. The letter, addressed to Disney CEO Bob Chapek and executive chairman Bob Iger, asks for detailed information about the layoffs, as well as the company’s policies regarding shareholders and executive pay.

“In the years leading up to this crisis,” writes Warren, “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.” Disney has called the letter “misinformed.”

Warren, a Democrat senator from Massachusetts and former U.S. presidential candidate, cites various figures in her argument that Disney has lavishly remunerated executives and shareholders for years, depleting capital that could have helped it weather the current crisis. For instance, she notes that the company spent $5.4 billion in dividend payments in the two fiscal years prior to the pandemic, only to cut the pay of more than 100,000 workers as the coronavirus spread in April.

The senator writes that the pay cuts Disney imposed on its executives in response to the pandemic were reportedly reversed on August 23, only a month before the layoffs were announced. She also challenges the company’s suggestion that California’s restrictions are to blame, pointing out that nearly 6,400 of the 28,000 jobs were in Florida, where Walt Disney World has been open (with reduced capacity) since July. Last week, Warren adds, a further 8,857 part-time Florida workers laid off.

Warren’s criticisms echo those of Abigail Disney, the granddaughter of Walt Disney Company co-founder Roy O. Disney. She has argued that the company operates on the back of its lowest-paid workers, while the excessive salaries earned by its upper management have “had a corrosive effect on society“.

In a statement, Disney said Warren’s “misinformed letter contains a number of inaccuracies.” It added: “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.”

Around two thirds of the 28,000 affected jobs were part-time. The layoffs reached Walt Disney Imagineering, the division that designs and builds Disney’s parks and experiences. The Orange County Register reported that over 400 of the 28,000 layoffs come from Imagineering, the creative division that produces the rides and shows for the Disney parks.

The full text of Warren’s letter is below:

Latest News from Cartoon Brew