Disney layoffs begin with its struggling interactive departments
Disney Interactive, the
struggling video game and digital media subsidiary of the Walt Disney Co., is
expected to begin a round of layoffs, according to a source with knowledge of
The cuts could come as soon as this week.
Disney Interactive, which lost more than $200 million a year between 2008 and
2012, is in a period of transition. The division parted ways with its
Co-president John Pleasants in November, just months after the successful
launch of its "Disney Infinity" video game.
The Wall Street Journal, which first reported news of the layoffs, said Disney
Interactive would lay off "several hundred people."
The layoffs would follow other recent cuts. In January 2013, Disney Interactive
cut 50 jobs and closed Austin, Texas-based Junction Point Studios, the
developer responsible for the "Epic Mickey" titles. In January 2011,
the company shut down Propaganda Games, the development studio responsible for
the "Tron: Evolution" video game, and laid off about 200 people.
An official at the California Employment Development Department said that
Disney Interactive has not given notice of any layoffs in 2014. (The Worker
Adjustment and Retraining Notification Act requires companies with 75 workers
or more to notify the state, within 60 days of the layoffs, of forthcoming
reductions that eliminate 50 or more jobs.)
A spokeswoman for Disney Interactive declined to comment.
Robert A. Iger, chairman and chief executive of Disney, said on a conference
call with analysts in February 2013 that "profitability at Disney
Interactive has been a goal of ours in 2013." But the division lost $87
million for its fiscal 2013, which ended Sept. 28.
However, the unit swung to a profit in the fourth quarter, posting operating
income of $16 million, an improvement from a $76-million loss from the same quarter
a year earlier.
Burbank-based Disney will report its quarterly financial results on Wednesday.
"Disney Infinity," released in August after a years-long development
process that cost Disney about $100 million, has been a hit for the company.
More than 3 million copies of the action-adventure game have been sold.
The game, available on multiple platforms including PlayStation 3 and Xbox 360,
incorporates physical toys into the game-play. It is sold in a $75 bundle that
includes the game, three figurines and the base that connects the physical toys
to the onscreen action.
The game includes popular characters from the company's films, including Buzz
Lightyear and Woody from Pixar's "Toy Story" franchise and Capt. Jack
Sparrow and Barbossa from the "Pirates of the Caribbean" movie
Though Pleasants was responsible for the launch of "Disney Infinity,"
his departure from the company was announced three months after the game
debuted. Disney Interactive is now run by Pleasants' former co-president, Jimmy
Before joining the company, Pleasants had served as chief executive of social
media gaming company Playdom Inc., which Disney acquired in 2010 for $563
Shares of Disney closed down $2.62 to $69.99 on Monday.
Source: Los Angeles Times