AMC Theatres Furloughs CEO and Staff as Coronavirus Pandemic Closes Cinemas

By Rebecca Rubin

LOS ANGELES (Variety.com) – AMC Theatres, the nation’s biggest cinema chain, furloughed more than 600 corporate employees after the coronavirus outbreak forced movie theaters across the country to close.

The action extends to every corporate AMC staff member, including chief executive officer Adam Aron. While AMC locations are closed, employees will have reduced working hours at reduced pay, or no working hours for no pay.

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.

All furloughed corporate employees will retain their active employment status, including heath benefits. In a statement released Wednesday, AMC said the company does not plan to terminate any corporate employees. However, the chain was forced to implement a furlough plan to preserve cash and ensure its circuits can reopen when the world has recovered from the crisis.

“As we all know, these are unprecedented times,” the company said in a statement. “AMC is doing everything possible to ensure that we can welcome back both our associates and our guests as our theatres reopen.”

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.

Prior to closures, AMC attempted to remain open by limiting theaters to 50% capacity. But last week, the Centers for Disease Control and Prevention recommended a limit on gatherings of more than 10 people.

AMC estimated its theaters would be closed for six to 12 weeks starting in the middle of March, though its unclear how long cinemas will actually remain shuttered. A-List, the company’s subscription service, will pause billing and payment for the duration of the closure.