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Disney Lays Off 28,000, Mostly at 2 Theme Parks

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Disney has announced that it will be eliminating tens of thousands of jobs at its resorts in California and Florida after suffering difficult losses from the coronavirus pandemic.

What We Know:

  • For the past six months, Disney has kept thousands of workers on furlough with full health benefits, but on Tuesday the company’s theme park division announced it would eliminate 28,000 jobs in the United States. Disney’s two theme parks will account for most of the layoffs, but Disney Cruise Line and Disney’s retail stores will also be affected.
  • “As heartbreaking as it is to take this action, this is the only feasible option we have in light of the prolonged impact of Covid-19 on our business, including limited capacity due to physical distancing requirements and the continued uncertainty regarding the duration of the pandemic,” Josh D’Amaro, chairman of Disney Parks, Experiences and Products, wrote in an email to Disney workers.

  • Before the pandemic, Disney’s theme parks in California and Florida employed roughly 110,000 people. The job cuts will come from both resorts. About two-thirds of the layoffs will involve part-time jobs that pay by the hour, but salaried workers and executives will also be among those facing layoffs.
  • Disneyland in California has not yet reopened as Governor Gavin Newsom has not allowed theme parks in the state to restart operations. The Disneyland complex employs about 32,000 people, the majority of which are unionized and have been on furlough since April. D’Amaro said in a statement that the layoffs were “exacerbated in California by the state’s unwillingness to lift restrictions that would allow Disneyland to reopen”.
  • On September 22, Disney held a virtual press conference in an attempt to pressure Newsom into allowing the park to reopen. Dr. Mark Ghaly, secretary of the California Health and Human Services Agency, has since confirmed the state is taking a “science-based approach” to reopening and that California can “minimize the health and economic risks” by holding off on reopening places that aren’t deemed essential, confirming that the parks would remain closed for the near future.
  • In Florida, government officials have been much less restrictive and Walt Disney World was able to reopen on a limited basis in mid-July with safety protocols in place. Disney World employed about 77,000 people in total before the pandemic and roughly half of the resort’s unionized employees, about 20,000 people, were called back for the reopening. The remainder of the employees have stayed on furlough.
  • Attendance at Disney World has been much weaker than the company had expected. Some families do not feel safe flying to Florida for vacation while others are choosing to delay their trips because they don’t want to pay for a Disney experience that might be “limited”. Currently, at Disney, there are no fireworks shows, fewer dining options are available, there are no hugs from Mickey Mouse, and park hours are shorter. Additionally, all guests have to wear face masks.
  • Disney World’s health and safety protocols aimed at curbing the pandemic’s spread appear to be working. Public health officials have said that to their knowledge, there have been no coronavirus outbreaks among guests or employees. Disney has not commented except to note that new infections in Florida have dropped sharply since Disney World reopened.
  • In the last quarter, revenue at Disney’s worldwide theme park division, which includes a still-closed cruise line and the Disney Store chain, totaled $1 billion, an 85% decline from the same period a year earlier. Operating profit also plunged by $3.7 billion, resulting in a quarterly loss of $2 billion. On Tuesday, D’Amaro said that the restructuring and layoffs would create a more “effective and efficient operation when we return to normal”.
  • Other assets of the Disney company are bouncing back from the pandemic. In August, live sports returned to ESPN. Although Disney continues to postpone film releases, movie and television production has restarted. Disney+ has been growing rapidly enough to keep Disney’s stock price relatively high at $125, down 3 percent from a year ago.
  • The communities around the Disney theme parks are also struggling. Unemployment in Orange County, Florida, home to Disney World, the Universal Orlando Resort, SeaWorld, and dozens of mom-and-pop tourist attractions, stood at 11.6% in August, up from 3.1% in August 2019, according to the Florida Department of Economic Opportunity. Unemployment in Anaheim, California, home to Disneyland, reached 15% in July, up from 3.3% in July of last year. The Anaheim Chamber of Commerce said this month that Disneyland’s closure had cost local municipalities $1.3 billion in taxes and other revenue.

D’Amaro calls the decision “heartbreaking” but “the only feasible option” due to “the continued uncertainty regarding the duration of the pandemic”. Disney officials said the company would provide severance packages for many laid-off employees and also offer other services to help workers with job placement.

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Business

The European Commission Will Begin Antitrust Probe into Google’s Advertising Unit

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The European Commission believes Google favors its own display ad technology services. If the European Commission’s claims are true, this means Google breached antitrust rules.

What We Know:

  • The Commission’s Executive Vice President Margrethe Vestager announced her intentions in a tweet. The probe will investigate Google’s restrictions on accessing data about user identity and behavior; usually, Google places these limitations on advertisers, publishers, and other third parties.

  • The Commission will also investigate complaints on Google not allowing competitors to broker ad buys on YouTube. Furthermore, Officials will examine if the corporation blocks user-tracking technologies on their platforms.
  • Google quickly responded to the claims via email. A spokesperson for Google wrote that thousands of European businesses use Google’s advertising products daily for their competitiveness and effectiveness. In addition, the spokesperson declared the tech company would “engage constructively” with the European Commission to answer their questions.
  • This is Google’s second investigation in one month. On June 7, CNBC reported that the French completion authority fined the tech giant €220 million, or $268 million, for abusing its market power in the ad industry. Google chose to pay the fine and also revealed it would give publishers more choice and better results when using its platforms.
  • Additionally, the European Commission already found Google guilty of breaching antitrust rules in 2019. Officials determined that Google imposed restrive clauses in contracts with third-party websites. The limiting sections prevented Google’s competitors from placing search ads on these pages. As a result, the Commission made Google pay €1.49 billion, or $1.77 billion.
  • The Commission does not know when it will finish its investigation on the tech titan.

Alongside Google, the European Commission also placed fines and punished other corporations such as Facebook for violating antitrust laws over the years.

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Attorneys General Say the Proposal to Slow Down U.S. Postal Service Should be Rejected

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The attorney generals of 20 states want the U.S. Postal Regulatory Commission to reject plans to slow down some first-class deliveries. They believe that the plan could harm local governments’ ability to carry out essential functions.

What We Know:

  • In March, Postmaster General Louis DeJoy suggested the United States Postal Services (USPS) slow down first-class delivery. Instead of people receiving their mail between one to three days, they would get it between one to five; he introduced this as part of his plan to cut $160 billion over the next decade.
  • The state prosecutors believe the new proposal sacrifices speed for reliability, which would slow down a significant portion of mail. As a result, city and state governments would take longer to complete their duties.
  • Led by New York’s AG, the lawyers asked the commission to urge the USPS to “abandon this misguided effort and instead focus its attention on improving its performance in delivering First-Class Mail and other market-dominant products.”
  • Alongside this unpopular proposition, the USPS also wanted to elevate most mail postage prices by 7%, making the cost go from 3 cents to 58 cents. However, a coalition of retailers, newspapers, printers, greeting card companies, and others rejected the motion. Furthermore, DeJoy wanted to cut retail hours and close locations to save money.
  • DeJoy’s ideas stem from the fact that the USPS has suffered significantly over the past few years. Throughout the last decade, mail volume declined by 28%. In addition, single-piece first-class mail volume went down 47%. The post office also dealt with poor delivery performance throughout the pandemic because of an influx of packages and fewer workers.
  • Because of the USPS’ monetary issues, a bipartisan group of 20 Senators introduced legislation that would provide the company with $46 billion in financial relief over the next decade.

The directive would remove a requirement that the USPS pre-fund retiree health benefits for 75 years. It would also make post office workers enroll in the Medicare government-retiree health plan.

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Supreme Court Favors Nestle and Cargill in Child Slavery Lawsuit

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The U.S. Supreme Court sides with food corporations Nestle and Cargill in child slavery lawsuits.

What We Know:

  • The Supreme Court ruled 8-1 in favor of the two corporations on claims brought up by six men who use to work for them. The six men say that they were taken from Mali as children and were made to work on cocoa farms in Ivory Coast. The group reports that they had to work between 12 to 14 hours a day on the farms; they were hardly paid for their work and had armed guards watch them as they slept, to prevent them from escaping.
  • The group’s case had been dismissed twice before reaching the US. Appeals of the 9th Circuit. They argued the case back in December and former President Donald Trump, supported both corporations. The men were suing the corporations for a case action suit that included all the child workers that the corporations used in the past. They also claimed that corporations “aided and abetted” their child workers and purchased cocoa beans from other farms that did the same.
  • Justice Clarence Thomas wrote that the 9th Circuit shouldn’t have allowed this case to be tried on U.S. land, as the claims happened overseas. The 9th Circuit allowed the case to be held because the corporations supposedly made “major operational decisions” in the country. He also said that the six men failed to provide enough evidence to sue under the Alien Tort Statute (ATS), proving that the companies committed labor abuse on overseas farms.
  • West Africa contributes to almost 70% of the cocoa distributed throughout the world, and the U.S. receives a majority of it. According to the U.S. Department of Labor, about 1.56 million children work on cocoa farms in Ghana and the Ivory Coast.
  • Paul Hoffman, the group’s lawyer, says that his clients are disappointed, but they aren’t giving up. He says the group will see if a lower court will amend the lawsuit and hopefully this meets the court’s requirement for ATS. Hoffman also believes that Nestle and Cargill were aware of what went on at the farms and they should be held accountable for not putting an end to it. However, neither corporation owns a cocoa farm in the Ivory Coast and only provided equipment and service to them.

Both corporations have maintained their innocence and said to be doing their parts to prevent child slavery from happening within their industry.

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