SUBSCRIBE TO NEWSLETTER
Stay in the loop! Subscribe to our newsletter and gain access to exclusive insights, trends, and news from the world of business and leadership. Don’t miss out!
Pixar, the renowned animation studio owned by Disney, is expected to undergo significant layoffs later this year, with projections indicating reductions of up to 20% of its team, which currently comprises 1,300 employees. Disney’s cost-cutting measures are reportedly influencing the staffing decisions at Pixar.
Layoffs Impacted by Disney+ Hires and Focus on Cost Efficiency:
Insiders suggest that the impending layoffs at Pixar will include the headcount originally hired for Disney+, the streaming division of Disney. The company has reportedly pushed Pixar to create content for Disney+, contributing to the workforce reductions.
Disney’s increased focus on cost efficiency and its target of cutting an additional $2 billion in costs are cited as key factors influencing the staffing decisions.
Pixar’s struggles come amid wider challenges Disney faces, including financial pressures and missed revenue targets. Disney’s streaming service, Disney+, has grown but is not yet profitable.
The studio aims to reach profitability by Q4 2024, driven by restructuring efforts and cost-cutting measures across the company.
Disney+ Subscriber Growth and Financial Performance:
Disney+ reported adding 7 million new subscribers in Q4, surpassing analysts’ expectations and reaching 150.2 million subscribers, including Hotstar.
While Disney+ has been making progress, its streaming division has incurred losses. As of Q4 2022, Disney+ reported nearly $1.5 billion in losses, which narrowed to $387 million in Q4 2023.
Impact on Pixar’s Release Strategy and Box Office Performance:
Pixar’s recent releases, including “Elemental,” faced challenges, prompting Disney to reconsider its release strategy. The animation studio has encountered changing audience preferences, challenges in theatrical releases, and the impact of streaming on traditional box office success.
Despite the challenges, Pixar is set to release an “Inside Out” sequel this year and “Elio,” a new film, in 2025.
The pace of releases may contribute to managing Pixar’s budget, which typically hovers around $200 million per film. The animation studio aims to navigate changes in audience behavior and preferences.
