Pixar Confirms Plans for Layoffs as Disney+ Struggles

EMERYVILLE, Calif. – Disney-owned animation studio Pixar is preparing for layoffs later this year, according to confirmed reports. Although initial sources speculate that the layoffs could reach 20% of the studio’s team of 1,300, Pixar has dismissed those numbers as too high. The actual number of affected employees is still being determined and will depend on production schedules and staffing requirements for future projects.

The layoffs are not expected to happen immediately but will be carried out later this year as Pixar shifts its focus to producing fewer films. Sources indicate that the job cuts will include positions that were specifically hired for Disney’s streaming platform, Disney+, which has not yet turned a profit.

Pixar’s upcoming releases on Disney+ have experienced mixed success. “Elemental,” one of the studio’s recent films, grossed half a billion dollars worldwide and was the most-viewed film on the platform during the quarter, despite being initially considered a box office bomb. However, other releases like “Lightyear” and “Onward” underperformed, prompting Disney to reevaluate its release strategy.

The cost-cutting measures at Pixar are part of Disney’s broader plan to reduce expenses. The company aims to increase cost-cutting efforts by an additional $2 billion, reaching a target of $7.5 billion. This is in response to a decrease in ad revenue from ABC and other TV stations, as well as ongoing losses within the Disney+ streaming division.

Pixar’s past success at the box office has been impacted by changes in audience behavior and preferences. While audiences in the past decade favored established intellectual properties, such as sequels and franchises, they now face sequel and franchise fatigue. Pixar’s upcoming releases, including an “Inside Out” sequel and a new film called “Elio,” are expected to help manage the studio’s budget, which typically averages around $200 million per film.

Pixar previously laid off 75 positions, including two executives, as part of Disney’s plan to reduce headcount by 7,000 jobs and $5.5 billion in costs. The studio’s job cuts align with Disney’s goal of turning streaming into a profitable growth business.

As Disney+ continues to expand its library, with the addition of Hulu content in the United States, the company is showcasing its ad tech at the Consumer Electronics Show. The ad tech works seamlessly across Disney’s linear and streaming platforms, following the launch of ad-supported streaming on Disney+ in 2023.

Despite the upcoming layoffs, Pixar remains a revered animation studio known for films like “Finding Nemo,” “Monsters, Inc.,” and the “Toy Story” franchise. The studio’s future success will depend on navigating the evolving streaming landscape and capturing audience interest with original and compelling content.