Walt Disney shares close lower on Wednesday, company to lay off 32,000 employees, mostly at theme parks, due to pandemic

Walt Disney Co (DIS) said in a filing that it intended to dismiss 32,000 employees, mostly at its theme parks business, with effect during the first half of fiscal 2021.

In September, the company had announced plans to lay off 28,000 workers.

Walt Disney shares closed lower for the fifth time in the past ten trading sessions in New York on Wednesday. It has also been the steepest single-session loss since November 12th. The stock went down 1.58% ($2.40) to $149.09, after touching an intraday low at $147.24, or a price level not seen since November 23rd ($141.70).

Shares of Walt Disney Company have risen 3.08% so far in 2020 compared with a 12.35% gain for the benchmark index, S&P 500 (SPX).

In 2019, Walt Disney’s stock went up 31.90%, thus, it outperformed the S&P 500, which registered a 28.88% gain.

“Due to the current climate, including COVID-19 impacts, and changing environment in which we are operating, the Company has generated efficiencies in its staffing, including limiting hiring to critical business roles, furloughs and reductions-in-force,” Walt Disney said in a SEC filing.

”As part of these actions, the employment of approximately 32,000 employees primarily at Parks, Experiences and Products will terminate in the first half of fiscal 2021. Additionally, as of October 3, 2020, approximately 37,000 employees who are not scheduled for employment termination were on furlough as a result of COVID-19’s impact on our businesses,” the company said.

Last month Disneyland Paris was once again closed, as French authorities imposed new lockdown restrictions. On the other hand, Disney’s theme parks in Shanghai, Hong Kong and Tokyo have remained open for business.

Analyst stock price forecast and recommendation

According to CNN Money, the 22 analysts, offering 12-month forecasts regarding Walt Disney’s stock price, have a median target of $155.00, with a high estimate of $170.00 and a low estimate of $115.00. The median estimate represents a 3.96% upside compared to the closing price of $149.09 on November 25th.

The same media also reported that at least 16 out of 25 surveyed investment analysts had rated Walt Disney’s stock as “Buy”, while 7 – as “Hold”.