Disney Interactive Set for Several Hundred Layoffs
Disney Interactive is set to lay off "several hundred" people in the latest round of cost-cutting measures at the struggling unit, The Wall Street Journal reported on Monday.
Jimmy Pitaro, the sole president of the group since former co-president John Pleasants departed late last year, has told employees that he intended to reorganize Disney Interactive, which employs about 3,000 people.
Disney Interactive has yet to post a full-year profit, and it is a goal of Walt Disney CEO Bob Iger that the underperforming asset do so. In the most recent quarter, the Interactive segment posted operating income of $16 million on $396 million of revenue, though it was just the second time in five years the segment showed a quarterly profit.
In the most recent fiscal year, the conglomerate's interactive segment posted revenue that rose 26 percent to $1.1 billion and an operating loss of $87 million. Of Disney's five segments -- media networks, parks and resorts, studio entertainment, consumer products and interactive -- only interactive posted an operating loss for the fiscal year.
Disney Infinity, a video game that includes plastic toys that can be used on an electronic base to change the virtual action, has been a hit for the unit, but Playdom, which Disney acquired in 2010 for $563 million, is a money loser. The Journal reported that many of the layoffs, expected as soon as Wednesday, will come from Playdom.
In 2011, Disney Interactive Studios, which made video games, laid off about 300 people. In 2012, Disney Interactive laid off 50 people, primarily from among those who worked on the many websites Disney operates. Last year, Disney shuttered Junction Point Studios, the video game studio behind Epic Mickey, and it laid off most of the staff at LucasArts, saying it preferred a "licensing model" for that asset so it would no longer develop video games there.
Disney Interactive declined to comment.