Disney Interactive lays off 700

26% of worldwide staff cut as company aims for "sustained profitability and scalability"

Disney Interactive has laid off roughly 700 employees, according to a New York Times report. The cuts represent 26 percent of the company's global workforce.

"These are large-scale changes as we focus not just on getting to profitability but sustained profitability and scalability," Disney Interactive president James A. Pitaro told the outlet.

The layoffs were pinned on Disney's decision to merge its mobile and social businesses, combined with a "dramatic" step back from in-house development in favor of more third-party licensing. The company plans to slash the number of games it develops annually in half.

The cuts come despite a recent turn to profitability for the division, driven in large part by the launch of Disney Infinity and its 3 million copies sold. (Follow-ups in the franchise are already in the works.) The company's Japanese mobile business is also booming, and Pitaro said Disney Interactive would be stepping up its investment in that region.

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Latest comments (11)

Greg Knight Freelance Developer 7 years ago
Never work for the Mouse.
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Corps mindset is just sickening,
despite a recent turn to profitability for the division
its ridiculous, these people help return the division to profitability, and for that.. they get fired.
. This whole ridiculous nonsense that corps should be all about shareholder returns and not about thing such as ethics, loyalty, social responsibility is nothing but nonsense. Nonsense that corp suits toss out there in order to create cover for their slash and burn policies all in order to create short term jumps in stock prices since they ( the suits) can cash in with bonuses, options and so forth if they can manipulate short term stock prices. Screw the workers, screw the customers, screw the long term health of the company, its all about the closing bell and how they can cash out in the next few years and move on.

Edited 2 times. Last edit by Todd Weidner on 6th March 2014 10:16pm

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I didn't know there were any haus of mouse studios left to slash, close or layoff :)
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Show all comments (11)
Paul Johnson Managing Director / Lead code monkey, Rubicon Development7 years ago
I got a better one, Todd.

How is sacking 700 people an "aid to scalability". I guess it must mean that when they have too few people in future, they can now "scale" as opposed to "have the right amount".

Surely the latter option is the better unless it's all about the bottom line after all...Imagine.
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Thomas Dolby Project Manager / Lead Programmer, Ai Solve7 years ago
Before it seemed like your job was never safe unless the company was making hit games, now it just seems like your job is never safe.

With this and the recent news at Irrational games, the industry is starting to sound like a really unstable place to be throughout. How is this industry supposed to keep attracting and maintaining skilled and experienced staff if this is becoming the status quo?

Edited 1 times. Last edit by Thomas Dolby on 7th March 2014 5:13pm

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Tom Keresztes Programmer 7 years ago
Before it seemed like your job was never safe unless the company was making hit games, now it just seems like your job is never safe.
Just for the sake of curiosity, which was the last hit game Disney Interactive made ?
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the problem is they bought Playdom for half a billion has made ZERO money since...
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Gary LaRochelle Digital Artist / UI/UX Designer / Game Designer, Flea Ranch Games7 years ago
How is this industry supposed to keep attracting and maintaining skilled and experienced staff if this is becoming the status quo?
The gaming industry doesn't seem to want to hire skilled and experienced talent. They rather hire nOObs fresh out of school so they can pay them a low wage and work them into the ground. Then fire them.
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Craig Page El Presidente, Awesome Enterprises7 years ago
The layoffs kind of make sense if you read the whole story over at the New York Times...

"Disney Interactive turned a profit in the last quarter largely because of Infinity, a combination video game and toy line that has sold more than three million copies worldwide since its debut in August."

"What has not been working is social gaming. Thursday’s reorganization is in some ways an admission that Disney’s $563 million acquisition of the social game company Playdom in 2010 was a bust.

At the time of the Playdom purchase, Facebook-based social games like Zynga’s FarmVille were skyrocketing in popularity. But that business quickly started to struggle as consumers moved to smartphones and other mobile devices with greater speed than anticipated. Playdom has not had a breakout hit since Disney bought it."
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As a summary! DIS purchased and closed AAA studios in the hope they could cash in on Hollywood glory. Them blooming Facebook zynga-it is came out and skewed the bean counters. Casual and social games were Introduced and the bean counters thought. Cha Ching! They promptly closed AAA studios entirely. They tried and tried and when Playdom was at its apex, they made a astronomical overpaid landgrab. Two are later, they realised the trend was not working for Disney in any remote way or form , but..they found a new golden goose. Two actually

Sky landers did fantastically well. Disney infinity would be a perfect money spinner
Two: with the purchase of Marvel and fantastic movie and cross media tie ins, there was actually profit. This gave rise to licensing up where there was minimal risk to Disney (except for brand dilution) and effectively the 3rd party would upfront all the risk and costs.z


And thus you will most likely see total closure of all internal DIS except for maybe 10-20% of its own crew for things that it has to do best itself...
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Greg Wilcox Creator, Destroy All Fanboys! 7 years ago
@Paul Johnson: Perhaps it's that new word for downsizing "Reverse Scalability" in play? Okay, I made that up just now, but I wouldn't be surprised if it get used somewhere.

Bleh. Anyway, hopefully those 700 won't be out of work for long... I always hate news like this because it means something is awry somewhere and it should be more off the top than from the bottom at the end of the day in some cases. You can take a haircut and it grows back, but lose your feet or legs and yeah... mobility decrease...
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