warren-v-chapek

Senator Elizabeth Warren Sends Letter to Bob Iger and Bob Chapek Questioning Mass Layoffs Following the Reinstatement of Executive Salaries

Senator Elizabeth Warren has penned a poignant, scathing letter to senior executives of The Walt Disney Company, demanding answers in the wake of mass layoffs impacting up to 28,000 Cast Members across Walt Disney World and Disneyland Resort. In it, she reiterates many valid points, from the blatant reinstatement of the salaries of Bob Chapek and other executives just months before the mass layoff, to other questionable company priorities, such as the payment of generous dividends to shareholders, and stock buybacks.

Dear Mr. Iger and Mr. Chapek:

I write to express concern about The Walt Disney Company’s (Disney) recent decision to lay off 28,000 workers during an economic recession while reinstating pay rates for highly compensated senior executives. In the years leading up to this crisis, 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. While I appreciate that your company has continued to provide health-care benefits to furloughed workers for the past six months, thousands of laid off employees will now have to worry about how to keep food on the table as executives begin receiving hefty paychecks again.

The letter starts out acknowledging the company’s efforts in providing healthcare to its furloughed workers throughout the pandemic, but ultimately bringing to light the fact that thousands of Cast Member will now have to worry about their livelihoods, while CEOs like Bob Chapek are back to raking in million-dollar bonuses.

Since the start of the pandemic, California has had over 830,000 COVID-19 cases, and over 16,000 individuals in the state have died… While your company has blamed your decision to lay off thousands of workers on California public health measures, which were implemented to prevent the spread of COVID-19 and save lives, nearly 6,400 of the employees you laid off are actually in Florida. And just last week, another 8,857 part-time employees were laid off, also in Florida.

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California is now a point of contention as state officials and Disney executives butt heads over reopening dates and guidelines. As Warren succinctly points out, while Disney blamed the prolonged closure of Disneyland Resort as a major factor in “exacerbating” the financial impact of COVID-19, the majority of layoffs actually took place in Florida.

The September 29th announcement describes reducing staff as a “very difficult decision,” resulting from the “the prolonged impact of COVID-19 on our business.” However, this explanation fails to acknowledge Disney’s short-sighted business decisions that reduced its capital, including (1) spending billions of dollars to repurchase its own shares over the last decade, (2) rewarding its shareholders through billions of dollars in dividend payments, and (3) showering its top company executives with over-the-top compensation packages…

Warren boldly states that Disney’s short-sightedness is what ultimately led to these mass layoffs, and while penned as a “very difficult decision”, it’s unclear the company will offer these Cast Members any form of relief. In short, “Disney took good care of its top executives and shareholders – and now is hanging its front-line workers out to dry.”

Sen. Warren’s thoughts mirror many of the opinions we’ve reflected across our posts here at WDWNT, and we appreciate her taking a stand on behalf of Cast Members across both coasts. You can read her full letter embedded below, including a series of 7 follow-up questions to which she requests a response by October 27, 2020.

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  1. They’re paying the people that can actually work at this point. Until Gov. Newsome figures stuff out and opens up Disneyland, Cast Members in park have nowhere to work.

      1. True, but as a Floridian who frequents Walt Disney World quite often, I can tell you that the parks are deserted compared to pre-Covid attendance. My most recent trip was five days ago. Until the general public feel safe attending these parks, I fear that attendance will be sorely lacking for quite some time. Sadly, as a result, there is a surplus of employees in the Florida parks. And although the parks are open, they are at limited capacity and reduced hours. Moreover, all the hotels have not re-opened, and many restaurants on the property are still closed. Approximately 6000 Walt Disney World employees were laid off. Over 22,000 were laid off for Disneyland in California. From what I’ve been told, laying off the employees makes them eligible for unemployment. Keeping them on a reduced schedule may keep them on the payroll but doesn’t provide them enough income to feed their families. Moreover, keeping them on a drastically reduced schedule makes them ineligible for unemployment benefits which would pay them more. I’ve also been told by employees affected by this layoff is that when attendance returns, they are the first in line for rehire‘s. Although Senator Warren’s comments are valid on many fronts, hindsight is always 2020. No one could’ve predicted a pandemic of this magnitude.

        1. Not true-I was there this weekend and it was pretty packed-maybe not to Disney standards lately but there were definitely people there and they were buying all of their overpriced items and food-and as far as the hotels, they are ALL open now and also pretty full… they have scaled back on a ton of things that they could have kept while charging the same or more for less?? There is no justification for it nor is there for the ridiculous compensations their top people are receiving-maybe that should have been cut first instead of all of those employees losing their jobs

        2. Nancy,

          22,000 Were not laid off at california, i believe only 2800 union cast members at Disneyland have been laid off to date.
          theres a wdwnt article dated 10/5/2020 reporting this.

          while 8800 from WDW have been laid off in total up to date, Many more were laid off from disneys merchandise division, DVC division, Espn, Disney Stores across the country.
          Blaming everything on Newsom and making him a villain is not good form. They should really blame themselves for not having a good business plan & the lack of leadership (Hint ChapeK)

  2. Someone needs to ask Pocahontas where the financial relief from the Government is going to show up!

    1. “Someone needs to ask” you to grow up and stop calling people names like you are still 8 years old.

  3. If I were a Senator, I’d be more concerned about Disney’s ties with the CCP – most notably Iger’s shady relationship with Chinese officials and bad decisions as a result of it (i.e. pandering, Mulan failure, failing Asia parks, etc.)

    Like a typical liberal, Ol’ Lizzy only cares about who’s making more money than she deems appropriate and how the company should “redistribute” that wealth to others.

    As a free market society, let the company fail on its own. They are doing a good job at that these days!

    1. warren never questioned why Chapek and Iger were commanding so much large salaries. (Actually liberals were behind increasing CEO salaries to millions in the early 80s. thats a different topic for another time)
      and Yes if a company makes billions of dollars in profit, the CEO of that company deserves to get paid $35 million per year.
      But in this case, Disney isnt making that profit since the pandemic, so isnt it ethical that these CEOs & so called executives take a pay cut. Hey i didnt deliver , i dont get the bonus. easy & simple.

  4. It sucks all the way around. I’m not on the side of any senator who will always get a (government) check no matter what. Coronavirus is a big cluster#$%^. But didn’t Big Government shut us all down to begin with? Why are the same people who are sending scathing letters the same ones who won’t let Disneyland open under safe conditions? These senators live with good ‘ol pensions, insurance, and paychecks no matter what. Who are they to question the real employers who NEVER rest, or get a day off? That’s why Disney management gets paid so much by the way.

  5. Senator Warner is correct. The amounts being paid to senior execs and shareholders is absolutely ridiculous, and I say that based on their Annual Report. Each makes more in one year than most people make in their working lifetimes. They could keep all employees on the payroll by giving up their income for this year and still have plenty from years past to live on.

  6. while I don’t agree with Elizabeth warren on her ultra socialist politics, but I got to agree with her on this issue, Disney lays the blame on Governor Newsom’s for the Massive layoffs, Yet the majority of layoffs are at the FL based Disney World.
    it is said that you lead by Example, Many major fortune 500 CEOs have forgone their multimillion dollar salaries (which they deserve) for the sake of keeping their lower tier employees employed.
    Here instead, the Disney CEOs gave themselves raises and enhanced their compensation packages by laying off 28,000.
    as a consumer it just makes me feel dirty when i give my business to such greedy corporations.

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