Sen. Warren slams Disney for layoffs, executives' salaries

Senator describes Disney's decision to pay dividends and buy back stock before the pandemic as 'short-sighted'

(Reuters) - U.S. Senator Elizabeth Warren slammed Walt Disney Co's move to lay off 28,000 workers while making shareholder payouts in the years leading up to the COVID-19 pandemic, demanding more information from company executives on the measures.

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Warren, a progressive former U.S. presidential candidate, blasted the entertainment company for the layoffs that came as Disney reportedly restored pay for some executives who had taken cuts due to the pandemic, according to a letter the Massachusetts senator sent to Disney on Tuesday and seen by Reuters.

Warren described Disney's decision to pay dividends and buy back stock before the pandemic as "short-sighted," because it reduced the capital the company could have used to weather the downturn.

TickerSecurityLastChangeChange %
DISWALT DISNEY COMPANY128.35+0.79+0.62%

"I would like to know whether Disney's financial decisions have impacted the company's decision to lay off workers," Warren wrote. "It appears that -- prior to, and during the pandemic -- Disney took good care of its top executives and shareholders -- and now is hanging its front-line workers out to dry."

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Disney did not immediately provide a comment. Warren said she appreciated that Disney has continued to provide healthcare benefits to furloughed workers for the last six months.

Bob Chapek (The Walt Disney Company)

Activist investor Daniel Loeb of hedge fund Third Point said the company should permanently end its dividend, after Disney suspended it in May, and invest in streaming programming instead.

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Roughly two-thirds of the 28,000 workers Disney said last month it was laying off were part-time. Disneyland, the company's theme park in California, remains shut due to the pandemic.

Abigail Disney, the grand-daughter of Disney co-founder Roy Disney, has also criticized the company for how it has handled the pandemic.

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Warren has been targeting executives who are under increased scrutiny as the economy falters from the pandemic, and as workers and other elected officials press them on issues such as racial justice and climate change.

Last month she criticized CEOs for failing to keep a pledge backed by the trade group the Business Roundtable to consider social responsibility above shareholder profits.

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(Reporting by Jessica DiNapoli in New York; Additional reporting by Lisa Richwine; Editing by Muralikumar Anantharaman)