Pixar, a Disney-owned animation studio, is facing layoffs this year, according to sources at the company and confirmed by Pixar itself. While initial reports suggested layoffs could be as high as 20%, or reduce the team of 1,300 to less than 1,000 employees, Pixar stated that the actual number of impacted employees is still being determined due to various factors. These include production schedules and staffing for future greenlit films. The layoffs are not immediate, but will take place later this year as Pixar shifts its focus to producing less content.
Insiders revealed that the layoffs also include headcount hired for Disney+, a move Disney pushed on Pixar to contribute to its streaming division, which has not yet turned a profit. Disney+ added 7 million new subscribers in Q4, bringing its total to 150.2 million, surpassing analyst expectations. The platform’s ad-supported customer base also grew by 2 million to reach 5.2 million.
Pixar is known for popular films like “Finding Nemo,” “Monsters, Inc.,” “WALL-E,” the “Toy Story” franchise, and others. However, it is the latest to be impacted by Disney’s cost-cutting measures. Disney’s forecasted $7.5 billion target of cost cuts follows a decrease in ad revenue from ABC and other TV stations and continued losses within the Disney+ streaming division.
CEO Bob Iger stated that Disney expects to bring its streaming service to profitability by Q4 2024 as a result of its company “restructuring.” As a part of cutting down on streaming losses, Disney+ lost “just” $387 million in Q4 2023, compared to the nearly $1.5 billion lost in Q4 2022.
Pixar’s recent film “Elemental” initially struggled at the box office, but later saw success on Disney+. The studio’s future film releases, including an “Inside Out” sequel and “Elio” in 2025, are expected to help manage its budget. However, this pace could also be influenced by a shifting landscape in audience behavior and preferences, as audiences now face sequel and franchise fatigue.
Earlier in the year, Pixar laid off 75 positions as part of Disney’s larger plan to reduce headcount by 7,000 jobs and $5.5 billion in costs. Moving forward, Disney is looking to turn streaming into a profitable growth business and is incorporating Hulu content into Disney+ in the U.S., among other measures to boost its streaming business.
Executives at the Consumer Electronics Show have been showcased Disney’s ad tech across its linear and streaming platforms, following the launch of ad-supported streaming on Disney+ in 2023.
