Culture news The world of animation is going badly: this famous animation studio could lose one in five employees, Disney’s failures have something to do with it
After the video game industry, it is the turn of the animation world to suffer from significant layoffs. We learned today that the Pixar studio will be hit hard in order to compensate for the losses caused by Disney’s streaming services.
Disney lays off at Pixar
Bad news for the Pixar studio. According to TechCrunch, the famous animation studio is reportedly on the verge of a significant wave of layoffs in the coming months. Sources close to the studio initially spoke of a workforce reduction of almost 20%, but Pixar has officially stated that these figures would be “too high” and “the number of employees impacted remains to be determined due to factors such as production schedules and team assignments for validated projects“.
According to the same sources, these layoffs would also concern staff hired specifically for Disney+, a division of Pixar which has not yet managed to generate profits. In essence, these layoffs would be motivated by a desire to compensate for the losses caused by Disney+.
Getting Disney+ out of the red
Disney announced a major restructuring plan a few months ago to reduce its costs by nearly $7.5 billion. Another objective to achieve for the big-eared firm: to get Disney+ out of the red. On paper, Disney is on the right track. Disney+ recorded losses of $1.5 billion in the fourth quarter of 2022, compared to $387 million in the same period a year later. According to the firm’s forecasts, its streaming service should be profitable by the end of 2024, thanks to this restructuring which “enabled incredible efficiency gains” according to its CEO Bob Iger.
This restructuring plan, as well as the poor results of the latest Pixar productions, would therefore be the cause of this wave of layoffs. The studio has struggled to capitalize on both these famous franchises and new creations, like Elementary which was considered a failure upon its theatrical release, before experiencing a second wind on Disney+. A result which now pushes Disney to review its release strategy.