U.S. MEDIA WILL LOG RECORD LAYOFFS THIS YEAR. U.S. media outlets have cut an estimated 28,637 jobs through late October, according to data compiled by outplacement firm Challenger, Gray & Christmas and cited by The Hill.
The number is just shy of the record 28,803 workers lopped from media companies in all of 2008.
In contrast, industry firings numbered just over 10,000 in 2019 and 15,474 in 2018, due significantly to newspaper readers browsing news online.
AMC Networks shed about 10 percent of its workforce in late November; NBCUniversal laid off 5 percent of workers in its television and streaming business and plans to cut one of every 10 workers, according to the trade paper Variety.
ViacomCBS turfed out 450 people in May, citing “economic conditions” brought on by the economic shutdown. However, prior to the pandemic, ViacomCBS had chopped 117 people because of consolidation within the company.
Still, media companies are hiring more workers than they did last year.
The industry has listed 1,586 open positions so far in 2020 thus far, far above 622 offered during the first 11 months of 2019.
Also, despite record job losses, the media industry is back in the pack of economic sectors shedding workers. The leisure industry has cut the most workers, at 845,945, retail 179,520, and transportation 159,674.
DISNEY WILL LAY OFF 4,000 MORE WORKERS. The entertainment giant will cut 4,000 U.S. workers by March, in addition to the 28,000 it had announced in September.
Most of the layoffs will come from the company’s theme parks and resorts, the new announcement said. The 32,000 laid-off workers represent about 14 percent of Disney’s pre-pandemic U.S. workforce of about 223,000.
Among Disney’s catalog of leisure and entertainment businesses, the pandemic and economic shutdown has struck its resorts and theme parks hardest. The division had about 100,000 employees last January.
Theaters’ closure across the globe also has forced Disney to postpone the release of the movie “Black Widow,” expected to earn major box-office returns.
Disney may scale back spending on film and television production, cut or stop contributions to pension and retirement medical benefit funds, and shrink or suspend its stock dividend, the company said in a filing with the U.S. Securities and Exchange Commission warning of the layoffs.
“Some of these measures may have an adverse impact on our businesses,” the filing noted.
Disney’s 12 theme parks around the world all were shut down from March through May. The parks in Shanghai and Florida have reopened, Disneyland Paris went dark again in October in France’s recent shutdown but is taking reservations for December 19 through January 3 in hopes of celebrating the Christmas holiday.
The original Disneyland in California, along with the rest of the state’s theme parks, will remain closed until a time when COVID cases fall below one per 100,000 of population in the counties in which the parks are located, as ordered by state guidelines.
As of 28 November, California’s infection rate was 35 per 100,000 and rising, according to COVID ActNow, a private, nonprofit organization.
Disney reported a second consecutive quarterly loss in October. The company had lost $2.8 billion this year as of 1 October, compared to a $10.4 billion profit for the same period last year.
The bright spot has been the Disney+ streaming service, which registered 73.7 million subscribers as of 3 October, up from 60 million in August.
The company will launch a general entertainment streaming service outside the U.S. in 2021 under the Star brand, Disney said in reporting its third-quarter results.
G.E. CUTS MORE JOBS IN JET ENGINE DIVISION. The company did not specify the number of additional jobs to be cut in addition to the two rounds of layoffs earlier this year that shrank the division’s 52,000-person workforce by about 25 percent.
“The revenue and profit projections not only for this year but also next year and the year after are fundamentally lower than what we budgeted or expected,” John Slattery, chief of G.E.’s aviation division, told workers in an internal company video seen by the Wall Street Journal.
“Overall, particularly in our commercial sector, we’ll be a smaller business and our cost structure must align,” he said.
The division’s revenue fell 32 percent during 2020’s first nine months; 2019’s full-year sales totaled $32 billion.
Overall, G.E.’s third-quarter loss was less than the second quarter’s and the company showed positive cash flow for the period.
The news boosted G.E.’s share price 32 percent during November to $10.07, a high not touched since early March.
NORWEGIAN AIRLINES GO BUST. Two of Norwegian Air Shuttle’s subsidiaries will file for examinership in Ireland, the equivalent of Chapter 11 bankruptcy in the U.S., the airline announced on 17 November.
The carrier made the decision after Norway’s government refused the company’s request for a second bailout this year.
Government ministers judged another bailout to be a poor use of taxpayers’ money to rescue an airline that entered the global financial crisis already laden with debt that was used to expand long-haul routes, the ministers said in a statement.
Norwegian expanded first to low-cost routes in Europe and then to servicing the U.S. and Asia.
The airline will continue to operate its current routes, which now are limited to a few domestic flights in Norway, it said in a statement announcing the filing.
Seeking examinership “will secure the future of Norwegian for our employees, customers, and investors,” CEO Jacob Schramm said in the statement.
SALES OF LUXURY GOODS WILL SHRINK 22 PERCENT THIS YEAR. Despite a strong rebound in China and reviving markets in the U.S. and elsewhere, sales of luxury items will fall 22 percent this year from 2019’s total, according to a forecast from Altagamma, an Italian luxury trade group, and consulting firm Bain & Co.
The €271 billion in sales predicted for 2020 would shrink the market back to its 2014 level and will not fully recover until some time in 2022 at the earliest, the study predicted.
The global shutdown revealed the sector’s reliance on China’s rising affluent class and forced purveyors of high-ticket goods to innovate, cut costs, and speed their adoption of e-commerce.
Two-thirds of the luxury market’s operating profit will “disappear in 2020,” with companies that quickly figured out how to cut costs faring better than those that did not, said Claudia D’Arpizio, a Bain partner, in a statement quoted by the Financial Times.
“This year will be the biggest drop ever for the industry,” she said. “Some trends, such on-line commerce and reducing reliance on tourists, are fast-forwarding” because of the pandemic and shutdown.
The sector’s recovery will be led by the growing number of affluent Chinese spenders, who will account for almost half the sector’s global sales by 2025, compared to a third in 2019, the Bain-Altagamma study expects.
As a result, brands such as LVMH and Kering are expanding their bevy of stores in China to satisfy consumers currently unable to visit New York’s Park Avenue or the Champs-Elysées in Paris.
Companies also are expanding their on-line presence in China through venues such as Alibaba’s T-Mall Luxury Pavilion.
Recently, Alibaba and Richemont, which owns a catalog of luxury brands including Cartier and Piaget, agreed to jointly invest $1.1 billion to create Farfetch, an on-line luxury marketplace for Chinese followers of high fashion.
CALERES TO CLOSE STORES, GO DIGITAL. Caleres, the St. Louis-based shoe retailer, will close 133 stores across the U.S. and Canada by February as the company shifts to a digital sales strategy, according to a company statement.
A growing share of company sales come from the web, Caleres said in a statement announcing the changes.
The strategic shift also will restructure the company’s management approach.
Caleres will take $20 million to $25 million in pre-tax charges because of the change and realize $10 million to $12 million a year in pre-tax gains, the announcement said.
This calendar year through September, the company’s revenues were $1.55 billion, compared to $2.22 billion during the same period in 2019.
TWO DOWN IN U.K. Today, Britain’s biggest department store chain, Debenhams, announced it is closing down its 124 U.K. stores and letting go of some 12,000 of its employees.
And yesterday, Topshop owner Arcadia filed for bankruptcy protection, thus putting some 13,000 of its U.K. employees at risk.
