Disney-owned Pixar Animation Studios has announced major layoffs as part of cost-cutting measures initiated by the company earlier this year. Approximately 14 percent of the studio's workforce, or nearly 200 employees, will be affected by the restructuring, making it the largest layoff in Pixar's history. However, the layoffs will not impact the top leadership within the company.
This decision comes after Disney CEO Bob Iger revealed plans in 2023 to reduce streaming content, focus on quality, and cut thousands of jobs to save money. In February 2023, Iger announced that Disney would be reducing its workforce by 7,000 employees, representing 3.2% of the company's global workforce. The company aims to save over $5 billion in costs, with half of the savings targeted at cutting back on non-content costs and reducing spending on sports by roughly $3 billion.
Pixar will now shift its focus back to feature films and away from direct-to-streaming series, as had been the focus during the pandemic. This move aligns with Disney's broader strategy to streamline operations and prioritize quality content production. The company hopes these changes will ultimately lead to increased profitability and efficiency.
In addition to the recent layoffs, Pixar had previously experienced setbacks with the box office performance of "Lightyear," which resulted in 75 job cuts last year. The film, with a reported budget of $200 million, fell short of expectations with worldwide ticket sales totaling only $226.7 million. This underperformance highlights the challenges faced by even established studios like Pixar in the competitive entertainment industry.
Overall, Disney's decision to implement cost-cutting measures at Pixar reflects a broader trend within the company to optimize operations and focus on long-term sustainability. While these changes may be difficult for the employees affected, they are part of a strategic effort to strengthen Disney's position in the entertainment market.