America’s top theater chains have furloughed over 90% of their workforce as the coronavirus hits the exhibition industry hard
The coronavirus’ hard hits on the movie theater industry have continued as AMC Theatres has furloughed 600 corporate employees who work out of its headquarters in Leawood, Kansas, including CEO Adam Aron.
The temporary layoffs come nine days after AMC announced it would close all of its theaters nationwide for 6-12 weeks in response to new guidelines from public health officials saying that public gatherings of more than 10 people should be avoided to prevent spread of the virus. National chains Cinemark and Regal have also closed their doors along with regional and specialty chains like Laemmle, Showcase, and Alamo Drafthouse.
“At this time, AMC is not terminating any of its corporate employees, however, we were forced under the circumstances to implement a furlough plan, which is absolutely necessary to preserve cash and to ensure that AMC can reopen our doors once this health crisis has dissipated,” AMC said in a statement.
“The furlough plan calls for reduced working hours at reduced pay, or no working hours at no pay, for the hopefully short period of time when AMC’s theatres are all closed. This action impacts every corporate AMC employee, including all those at the highest executive levels and including AMC’s chief executive officer.”
Similar widespread furloughs have also been implemented by one of AMC’s main competitors, Regal Cinemas, as both chains have furloughed over 90% of their workforce in an effort to maintain cash flow. Distribution executives have told TheWrap that the third major theater chain, Cinemark, is in a better financial situation to navigate the pandemic, but it too has reportedly furloughed its hourly employees with two weeks pay.
The pandemic has come at a particularly bad time for AMC. While the theater has enjoyed strong audience turnout over the past two years thanks to hit films like “Avengers: Endgame,” the chain still has a considerable amount of debt after heavy spending on major projects like the launch of its A-List ticket subscription program and the acquisition of Carmike Cinemas. With a reported cash flow of around $600 million, financial analysts have told TheWrap that the pandemic could force AMC into serious financial danger if theaters are forced to stay closed through the entire summer.
But help may be on the way as the U.S. Senate is close to approving a $2 trillion stimulus bill that could help lower the amount of cash flow that movie theater chains and independent theaters have to spend to stay afloat while their doors are closed. While the final text of the bill has not been disclosed, the National Association of Theater Owners remains confident that movie theaters will be identified as a “distressed industry” that would make it eligible for further federal support.
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