Los Angeles Business Journal

More Layoffs at Disney Interactive

By Business Journal Staff Thursday, March 6, 2014

Continued restructuring in the interactive division of Walt Disney Co. will result in the firing of about a quarter of its workforce, according to media reports on Thursday.

The Burbank entertainment and media company will make the 700 job cuts by closing offices in Chicago, New Jersey, Colorado, South Korea and Hyderabad, India, the Los Angeles Times reported.

This latest round of layoffs includes the previously reported loss of 200 jobs at the interactive division’s Playdom.com social media site business. Disney bought the site in 2010.

The Disney interactive division, with its main offices in Glendale, has struggled in the past few years to develop top-selling console games. A year ago Disney closed its Austin, Texas game studio Junction Point as a result of poor sales of its “Epic Mickey 2: The Power of Two” game.

The division consolidated some lines of business to focus on high-quality digital games, Disney Interactive said in a statement reported by the Times.

“As a result of this restructuring, we have undergone a reduction in workforce. These actions were difficult but necessary given our long-term strategy focused on sustainable profitability and innovation,” the statement said.

In Disney’s most recent earnings for the first quarter ending Dec. 31, the interactive division had revenue of $403 million, a 38 percent gain from the same period a year earlier. The company attributed the increase to strong sales of its “Infinity” game released in August that features multiple Disney and Pixar characters.

Disney Interactive made prior staffing cuts in November 2012, January 2011 and March 2011.

Shares closed up 66 cents, or less than 1 percent, to $83.34 on the New York Stock Exchange.