Disney’s Streaming Strategy Leads to Layoffs at Pixar in 2024

Disney-owned animation studio Pixar is poised to undergo layoffs this year, TechCrunch has learned and the company confirmed. The studio stressed the layoffs are not imminent, but will take place later this year as Pixar focuses on making less content. According to insiders, the Pixar layoffs include headcount that was hired for Disney+ — hires Disney pushed on Pixar to produce for its streaming division, which hasn’t yet turned a profit. In Q4, Disney+ added 7 million new subscribers, bringing its total to 150.2 million, including Hotstar, beating analysts’ expectations of 148.15 million subscribers. A Disney subsidiary, Pixar is best known for films like “Finding Nemo,” “Monsters, Inc.” “WALL-E,” the “Toy Story” franchise, and others.

Pixar: Changes Ahead for the Beloved Animation Studio

“I think the challenges for us were basically to not do six sequels,” revealed the late Steve Jobs in a 2011 interview about Pixar’s original films.

The company, which has captivated audiences with heartwarming stories like “Finding Nemo,” “Monsters, Inc.,” “WALL-E,” and the “Toy Story” franchise, may be facing some changes in the near future. According to sources at the company, there are rumors of layoffs in the midst, with potentially up to a fifth of their team of 1,300 employees being let go.

However, a spokesperson for Pixar has stated that the layoffs will not be as significant as speculated. The exact number of affected employees is still being determined, as there are many factors at play, such as production schedules and staffing for future projects.

The cuts are not expected to happen immediately, but rather later this year as the company shifts its focus towards creating less content. Part of this change in direction could be attributed to the pressure from its parent company, Disney, to produce content for their streaming platform, Disney+.

The streaming division, which encompasses Disney+, Hulu, and ESPN+, has recently reported a significant increase in subscribers and ad-supported customers. In fact, in the last quarter, Disney+ saw a rise of 7 million subscribers, bringing its total to 150.2 million. This growth has been attributed to popular titles like “Elemental,” a Pixar film that grossed over half a billion worldwide and was the most-viewed film on Disney+.

Despite its success on the streaming platform, “Elemental” was initially considered a box office bomb and one of the worst debuts in Pixar’s 28-year history. This, along with other under-performing titles like “Lightyear” and “Onward,” has led Disney to reconsider its release strategy and prioritize theatrical releases over streaming. CEO Bob Iger has emphasized the importance of getting Disney+ out of the red by 2024, and the company has been making efforts to cut costs and restructure to reach this goal.

Katz, an entertainment industry strategist, points out that Pixar may also have to adapt to changes in audience behavior and preferences. In the past decade, audiences have shown a preference for pre-established intellectual property (IP), which requires less marketing and buy-in from viewers. However, there has been a shift towards original content in recent years.

Pixar, known for its high-quality films with budgets of around $200 million, may also need to keep a closer eye on their budget. Other animation studios, such as Illumination and DreamWorks, work with smaller budgets of $75-100 million. This could be a key factor in determining the success and profitability of Pixar’s future releases.

In light of these changes, Pixar has already made some cuts in its staffing, with 75 layoffs earlier this year. This is a part of Disney’s larger plan to reduce headcount by 7,000 jobs and $5.5 billion in costs. The company is also looking to expand its streaming business, with plans to incorporate Hulu content into Disney+ in the US.

At the Consumer Electronics Show, Disney executives have been showcasing their ad tech that will work across their platforms, following the 2023 launch of ad-supported streaming on Disney+. As the streaming landscape continues to evolve, it seems that Disney and its subsidiaries are determined to stay ahead of the game and continue to captivate audiences across all platforms.

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Zara Khan

Zara Khan is a seasoned investigative journalist with a focus on social justice issues. She has won numerous awards for her groundbreaking reporting and has a reputation for fearlessly exposing wrongdoing.

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