AMC Furloughs 600 Corporate Employees, Including CEO
AMC Theatres has furloughed 600 corporate employees who work out of its Leawood, Kansas headquarters, including CEO Adam Aron — a result of the coronavirus’s ongoing impact on the movie theater industry.
The temporary layoffs come nine days after AMC announced it would close all of its theaters nationwide for 6-12 weeks in response to guidelines from public health officials saying that public gatherings of more than 10 people should be avoided to prevent the 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.
*Also Read:* AMC, Regal, Cinemark and Other Theater Chains Close Nationwide Amid Coronavirus Crisis (Updating)
“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 hits 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.
*Also Read:* Movie Theaters Seek Federal Bailout From Congress After Coronavirus Shutdown
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.
Last week, Aron spoke to CNBC about how the entire movie theater industry is in urgent need of federal support.
“Literally every movie theater in the country is shut or shuttering. There are no revenues coming in the door,” he said. “The country’s banking system is just overwhelmed with companies seeking additional liquidity at the moment, so we’re going to have to get liquidity from some place if we all in our industry have expenses and none of us have revenues.”
*Related stories from TheWrap:*
AMC Furloughs 600 Corporate Employees, Including CEO
AMC, Regal, Cinemark and Other Theater Chains Close Nationwide Amid Coronavirus Crisis (Updating)
Movie Theaters Seek Federal Bailout From Congress After Coronavirus Shutdown