Pixar to lay off 14% of staff as Disney looks to cut costs

Pixar Animation Studios is laying off about 14% of its workforce as Disney (DIS) seeks cost-cutting measures and scales back on content made for streaming. This move comes after Disney executed a wave of layoffs last year in an attempt to boost profitability.

Yahoo Finance's Seana Smith and Brad Smith report more on the story and what it means for the media giant's future.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Melanie Riehl

Video transcript

The vibe on the street today is a little less animated than usual Pixar Animation studios is laying off about 14% of its workforce as Disney looks to cut costs and scale back on content made for streaming.

The cuts signal that Disney might turn its focus back on feature films that are released in theaters.

Now, a lot of these Pixar films are also released in theaters.

We should mention some of them have been wildly successful for Disney over the years, both in performance at the box office, but then additionally, even more over into merchandise as well.

Here we're taking a look at shares relatively muted on this announcement here.

Um This comes after what we had seen in a wave of layoffs that Disney put in last year.

But now this kind of still lingering in some of the other strategic parts of the business where Disney will need to reallocate costs in order to hit some of the targets that have become more brought to light as a result of activist campaigns, putting pressure on the executive team at the company.

Yeah, I think this is just the latest iteration of I cutting back spending in some areas trying to boost profitability.

Clearly, the goal and the priority for Disney at this point.

So this move here is certainly a reversal than what we have seen over the last couple of years.

We know that Disney had been using Pixar to really build up its Disney Plus customer base.

They debuted three films, Soul Turning Brad and Luca specifically online in an effort to do that.

And I think it did work to some extent, they've also had original series that had been a huge hit here for Disney Plus Cars on the Road.

It's one of the favorites, boys.

They love that show.

It's huge.

If with young kids also Doug Days, that was a series of shorts about a dog from the movie Abso It has worked, it has worked.

But I think right now in terms of the priority and where those priorities lie, Iger is very focused on scaling back that spending.

So as a result, they aren't going to be, uh they aren't going to be producing these original shows for Disney Plus as part of that broader restructuring here.

And like you said, that's resulting in unfortunately layoffs for about 14% the workforce.

Yeah, absolutely.

I just had to look up Doug Days by the way too.

Yeah.

Yeah.

Cute dog from the movie.

Uh Squirrel.

Anyway, one of the other things that we're gonna continuing to track here, of course, among the broader media landscape is just where Disney is going to be able to going forward, monetize a lot of the streaming bundles that they had talked about here, of course, picture of playing into that.

Um So we'll see what more the company has to say about this and uh how this plays into the strategy going forward.

We certainly will.

All right, Disney moving just slightly to the upside here this morning.