We knew this coronavirus pandemic was going to hit theaters hard, but I don’t know if we expected it to happen so quickly.
It was announced today that AMC Theatres has furloughed more than 600 corporate employees, including CEO Adam Aron.
Last week, AMC announced its 634 locations in the U.S. and Canada, and more than 1,000 venues worldwide would indefinitely shutter because of the global health crisis. That caused more than 26,000 theater employees to be furloughed or let go. The closures left AMC with no source of revenue, while still having to pay pricey fixed overhead costs.
The good news for these corporate employees is that they will still receive healthcare benefits, and their job will be waiting for them when this whole thing is over with. The lowly employees working inside the theaters don’t have that same assurance.
On Tuesday, AMC disclosed that it had borrowed $304 million from two pre-existing credit facilities on March 20, in response to the coronavirus crisis. The company said it was aiming to ‘increase its cash position and preserve financial flexibility’ in light of the outbreak. The borrowing exhausted the available amount under the credit facilities.
When this shutdown began, theater chains were hoping the lockdown would only last a month or two, but now it’s looking like it could be 3-4 months, depending on where you are located.[mashshare]