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Above: Inside Out 2
A wave of layoffs is planned at Pixar animation studios this year, according to TechCrunch. Their sources mentionned job cuts that could reach up to 20% of the workforce. In other words, the Pixar team would shrink from 1300 people to less than 1000 in the coming months.
Pixar confirmed this report, but disputed the figure and emphasized that these cuts are not imminent. Reuters, based on “a source familiar with the situation”, explains that Pixar doesn’t know yet how many people will be let go.
Layoffs at Pixar: Disney+ related jobs will be cut
In other words, the extent of the layoffs is still unconfirmed, but they will indeed take place this year. The job cuts would primarily affect staff hired for shows intended for the Disney+ platform, such as Win or Lose.
For now, the impact of the layoffs on the studio’s other activities remains uncertain. However, the Reuters source clarifies that movie releases should not be affected.
Disney is tightening its belt
These layoffs must be seen in context: Disney is struggling to improve its financial situation through a broad cost-saving plan. It should be reminded that Covid had a major impact on the group, particularly on theme parks and cruises, which represent a significant revenue stream. As for animated features, several movies were not as successful as the studio hopes, and Disney chose to release several Pixar animated features directly on Disney+.
In a nutshell, Disney is still loosing a lot of money, which is why CEO Bob Iger implemented drastic spending cuts. In its latest financial report, Disney explained that they plan to reduce expenditures by $7.5 billion each year through “aggressive management” of their cost base. These savings are even more substantial than previously announced (the group had announced that they would be able to save $5.5 billion each year).
These savings have resulted in multiple waves of layoffs, affecting the entire group. Pixar was already hit last year with 75 job cuts (our article on the matter). Director Angus MacLane and producer Galyn Susman, who worked on Lightyear, were also pushed towards the exit.
Disney’s strategy also includes producing less content for Disney+ (Disney’s strategy being to licence more third-party content). Hence the decision to part ways in the coming months with Pixar teams that worked on content for Disney+.
Disney is still in the red
For now, Disney+ is still operating at a loss, even though CEO Bob Iger announced that the streaming service should turn profitable by the last quarter of 2024. Disney+ managed to attract 7 million more subscribers in the last quarter of 2023, totaling 150.2 million worldwide.
As for Disney as a whole, in the last fiscal quarter of 2023, the deficit significantly decreased: Disney lost $387 million compared to $1.47 billion a year earlier. Bob Iger, CEO of The Walt Disney Company, explained during the announcement of the financial results:
While we still have work to do, these efforts have allowed us to move beyond this period of fixing and begin building our businesses again.
It remains to be seen if the continuation of these measures in 2024 will enable Disney to return to profitability and end the successive layoff plans, at Pixar and in Disney as a whole.
