Disney to Lay Off 28,000
The Walt Disney Co. said it's laying off 28,000 employees at its U.S. theme parks as a result of capacity limits related to the pandemic and the inability to reopen Disneyland in Anaheim, California.
The company's Walt Disney World in Orlando, Florida, reopened with reduced capacity in mid-July, which has taken a toll on the company’s finances.
Josh D’Amaro, chairman of Disney Parks, Experiences and Products, said in a statement that the situation has been “exacerbated in California by the state’s unwillingness to lift restrictions that would allow Disneyland to reopen.”
Disneyland closed in March when the pandemic began to take hold and California was one of the first states to shut down. It temporarily furloughed employees but still paid for their healthcare benefits.
Of the 28,000 U.S. employees now being permanently laid off in California and Florida, D’Amaro said 67% are part-time.
While California kept the virus at bay in the early months, cases started surging in late June and early July after cities and counties had begun reopening. The state tightened restrictions to address the surge.
Gov. Gavin Newsom has released a color-coded tiered reopening plan that is more methodical and based on broader health data. Orange County, home to Disney's flagship theme park, is still in the “red” tier, which the state considers at risk of substantial spread of the virus.
The state’s new plan includes protocols for 20 industries, but theme parks are not among them. Mark Ghaly, secretary of the California Health and Human Services Agency, said during a coronavirus briefing Tuesday that guidelines for theme parks are close to being announced.
“We are working hard to get that out in a responsible way as soon as possible so planning can be done by both the counties that are home to those theme parks as well as the operators of those theme parks,” Ghaly said.
Consumer Confidence Rebounds
Consumer confidence reversed course in September with one of the biggest monthly gains in years. Even so, it was still far below the months before the pandemic.
Business and research organization The Conference Board reported Tuesday that its index increased 15.5 points to hit 101.8 in September, based on a monthly survey of 5,000 households. Economists had forecast a more modest rise to 89.6.
The index benchmark starts with 100 in 1985. Above 100 means consumers are more confident about the economy than those in 1985. In February, the index was at 132.6.
“A more favorable view of current business and labor market conditions, coupled with renewed optimism about the short-term outlook, helped spur this month’s rebound in confidence,” said Lynn Franco, senior director of economic indicators at The Conference Board, in a statement. “Consumers also expressed greater optimism about their short-term financial prospects, which may help keep spending from slowing further in the months ahead.”
The group’s expectations index surged from 86.6 to 104. This index’s results are a subset in calculating the overall index rating.
In the survey, the board found improving attitudes toward business conditions with those viewing them as bad decreasing from 43.3% to 37.4%. Those who believed business conditions will improve over the next six months increased from 29.8% to 37.1%.
Small Business Hiring Sees Uptick
Small business hiring rose a little in September while wage growth slowed, according to the latest report from payroll company Paychex and its data partner, IHS Markit.
The monthly index, based on data culled from firms employing fewer than 50 people, rose to 94.44, a .05 gain from August. A rating below 100 means hiring is slower than the benchmark year in 2004, a year considered normal growth.
“While it was positive to see a slight improvement in September, the national jobs index and small business hiring has remained largely flat over the past several months,” James Diffley, IHS Markit’s chief regional economist, said in a statement.
The jobs index is below the index’s bottom point during the previous recession in 2009.
Denver led the top 20 cities for another week for small business hiring while Florida was the top state. Neither are above 100 on Paychex’s index.
Martin Mucci, Paychex president and CEO, said that while hiring is flat, “when monitoring the number of employees being paid, steady growth is being seen, indicating that small businesses are bringing existing employees back to work.”
Paychex shows that hourly wage growth on an annual basis registered 3.14% in September, slower than the high point of 3.31% in June. Weekly earnings growth stayed at 3.86% for the second week.