Friday, April 05, 2013


Earlier this week The Walt Disney Company (DIS) shut down the video game company Lucas Arts, laying off 150 employees.  Last September, Disney cut about 200 people at its Disney Interactive video game, as the company moved away from console games to focus on online and mobile entertainment.  An additional 100 staffers have been laid off in two cuts since.  A year prior, the company laid off a reported 200 employees from its interactive unit.  Now they intend to lay off a number of additional workers in the coming weeks, according to Reuters.  Cuts to both Disney's film studio and consumer products division could come as early as two weeks.  Employees from animation and marketing and home video are expected to be laid off as well.

The studio job cuts will center on the marketing and home video units and include a small number from the animation wing, said the sources, who spoke on condition of anonymity because the plans had not been made public. Staff reductions at the consumer products unit will largely result from attrition, another person said.  

It's currently unknown how many reductions will occur, but the layoffs are reported to be a cause of an internal audit from CEO Bob Iger who wants to cut costs.  In February, the company revealed lower first quarter results, attributing them in part to " rising costs of acquiring TV sports rights for its ESPN division ," something Iger previously predicted would occur at the end of 2012.  Disney, headquartered in Burbank, California, started an internal cost-cutting review late last year to identify cutbacks in jobs it no longer needs because of improvements in technology, one of the people said.  It is also looking at redundant operations that could be eliminated following a string of major acquisitions over the past few years, said the person.  

The studio is now heavily relying on brands Pixar, Marvel, and, now Lucasfilm to release films.  Marvel has six films set to release now through 2015, Pixar just announced a highly-anticipated sequel to "Finding Nemo," and the new "Star Wars" trilogy is set to begin in another two years.  Work on future "Star Wars" related games will most likely come from its own troubled game segment, Interactive, which is hoping for a massive success when its new gaming initiative, Infinity, launches later this summer.

Disney’s stock continues to hit all-time highs reaching $53.53 in January and $57.76 last month.

1 comment:

Anonymous said...

hi, is the fixed income guy still on this blog? Please get him to write again. Equities are boring.