Newly-installed CEO, Bob Chapek issued a memorandum to employees Monday that senior executives at the company will be taking sizable cuts to their salaries effective April 5.
Chapek is taking a 50% pay cut, while executive chairman Bob Iger chose to forgo his year’s salary. “All VPs will have their salaries reduced by 20%, SVPs by 25% and EVPs and above by 30%,” Chapek wrote in the memo.
According to Chapek, the cuts are, “necessary steps to manage the short- and long-term financial impact on our company.”
The memo came one week after Disney decided that Disneyland and Walt Disney World resorts will be closed indefinitely, their biggest revenue drivers, according to their First Quarter Fiscal Report for 2020. In addition to their parks and resorts, their cruise lines have been suspended and retail stores are temporarily shut down.
Despite Disney+’s success with fans in quarantine, Disney joins the growing list of companies making large pay cuts in the wake of the outbreak. Due to the movie theater closures, theatrical releases haven’t had a chance at the box office. After only one week after its release, Pixar’s latest film, “Onward,” will be available on-demand.
Disney, along with other Hollywood studios, has also halted film and TV production as a result of social distancing guidelines.
Earlier this month, the outbreak prompted both the NCAA and the NBA to cancel their seasons. Without these programming, ESPN, a Disney property, is expected to lose millions in advertising revenue.
“Your dedication and resilience during this difficult time are truly inspiring, and it gives me renewed confidence that we will come through this crisis even stronger than before, as we have so many times in our company’s history,” Chapek concluded.