Disney Infinity (Credit: Disney Interactive)
Disney’s oft-troubled video game and internet division is laying off approximately 25% of its workforce.
Disney Interactive announced plans to cut 700 jobs on Thursday. The move comes as part of yet another restructuring, which will (once again) shift its focus to mobile games.
Game output at the division will be cut in half as a result of the moves.
"Disney Interactive has consolidated several lines of business as part of an effort to focus the division on a streamlined suite of high quality digital products," a Disney spokesperson said in a statement. "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 Games and Interactive division has been struggling financially for most of its existence, having racked up over $1 billion in losses. For the past two quarters, it has achieved profitability, though, thanks in large part to the toy/game hybrid Disney Infinity, which has sold nearly 3 million copies.
Most of the layoffs will seemingly hit Playdom, a social gaming arm that Disney bought in 2010 for a then unheard-of $563 million. Former Playdom CEO John Pleasants left Disney last November. Playdom will be fused with Disney Interactive’s mobile unit as part of the restructuring.
Company officials downplayed theories that the unit was abandoning any part of the game world, though.
"We're not exiting any businesses, and we will pursue licensing partnerships in which we retain a lot of creative input," Disney Interactive president James Pitaro told the New York Times. "But this is a doubling down on mobile and an effort to focus much more intently on a core set of priorities."
The cuts will also mean the shutdown of BabyZone, a blog site for new moms, and Spoonful, a blog about food and crafts. Mobile properties, including “Where’s My Water” and “Stack Rabbit,” are not expected to be affected by the move.
The cuts, while severe, were not unexpected. Last month, reports began circulating that Disney was planning to pare down Disney Interactive, with a specific focus on Playdom.
They’re also not the first time Disney Interactive has been forced to pare back. In 2011, the company cut an estimated 350 jobs as part of another major restructuring, where the company vowed to focus future efforts on the mobile market.