Cinemark lays off 17,500 hourly workers, drastically cuts pay for remaining employees

PLANO, TX – Plano-based Cinemark is laying off thousands of hourly employees, furloughing half its corporate team at substantially reduced salaries, cutting pay for its remaining workers and suspending its dividend payment to shareholders to keep the company solvent while its movie theaters are closed.

The company disclosed the cash-saving steps in a regulatory filing Monday. It shut down its theaters on March 18 as a result of social distancing and lockdown orders.

Cinemark characterized its financial position as “strong” entering the pandemic, with $479.4 million in cash on March 31. The dividend suspension will save another $42 million a quarter.

“Even if our theatres remained closed for the remainder of the year, Cinemark USA believes that it has sufficient cash to sustain its operations for the remainder of the year,” according to the filing.

The biggest cuts involved layoffs of 17,500 hourly workers, furloughs of half the company’s corporate team at 20% pay and 50% pay reductions for its remaining employees. CEO Mark Zoradi and the company’s board of directors earlier said they’re giving up their salaries, and other executives agreed to take 80% pay cuts for as long as the theaters remain closed.

The company said it’s working with its landlords and suppliers to modify contractual payments and expects to receive a $20 million tax refund under the CARES Act. It’s also reviewing other potential tax benefits in the historic stimulus legislation.

“We remain optimistic that [the movie business] will rebound and benefit from pent-up social demand as home sheltering subsides and people seek togetherness with a return to normalcy,” the company said in the filing.