Pixar Animation Studios has announced historic layoffs, impacting approximately 14% of its workforce – around 175 employees. This move comes as parent company Walt Disney focuses on quality theatrical releases and refocuses efforts from Disney+ feature films. However, consumers wonder if the workforce cuts mark the beginning of the end for streaming.
The long-awaited job cuts, which hit Pixar this week, were initially anticipated to impact 20% of the animation studio’s employees and about 260 workers. However, the final number is lower than expected. Pixar employees have been informed of the looming job cuts since January 2024, but the restructuring is finally taking place now in May 2024.
Pixar was founded by Lucasfilm in 1979, and has faced challenges as Disney attempts to return to the big screen with disappointing box office results for films like “Lightyear” and “Onward.” These are a few examples of films that were projected to perform much higher but ended up being overwhelming box office flops.
The rapid shift to streaming content as opposed to buying movie tickets and films started during the pandemic. This shift prompted CEO Bob Iger to demand quality theatrical releases over quantity.
Pixar’s largest layoffs in history affect around 175 employees but do not impact upper management. Despite less employees being affected than originally projected, this workforce cut marks the largest reduction in Pixar history.
Disney purchased Pixar in 2006 and used the animation studio to create content for Disney+ under Bob Chapek’s brief tenure as CEO in late 2022.
“Elemental,” a recent success story, generated around $500 million in box office receipts last year and has been popular on Disney’s streaming platform.
Pixar is releasing “Inside Out 2” on June 14 and has plans for “Elio” in 2025 and “Toy Story 5” in 2026. They hope these releases will be enough to course correct and eliminate any need for further cost-cutting measures.
The layoffs mark a significant change as Disney focuses on quality theatrical releases, refocusing efforts away from short-form series for Disney+ which have been largely unsuccessful.
Despite the layoffs, Pixar has high hopes for upcoming releases and remains dedicated to preventing future cost-cutting measures
Pixar President Jim Morris had this to say to his employees in a memo on Tuesday: “Despite the challenges in our industry over the past few years, you have all consistently shown up to contribute, collaborate, innovate, lead, and do great work at this studio. I give you my deepest thanks, and for those who will be leaving us, I am hopeful that our paths will cross again, both professionally and personally.”
