The roughly 700 layoffs have been widely anticipated for the operation, Disney‘s only money-losing division in the fiscal year that ended in September. With the cuts, Disney Interactive will trim by half the number of games it puts out each year and will reduce the number of concepts it will develop in-house –relying more on ideas licensed from outsiders. It also will close websites BabyZone.com and Spoonful.com as it looks for sponsors to support Disney.com, eliminating the need to sell banner ads. The company says that it “has consolidated several lines of business” to help “focus the division on a streamlined suite of high-quality digital products. 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.” A shakeup seemed inevitable after CEO Bob Iger tapped Jimmy Pitaro in November to run the division solo. Its social games operation likely will suffer from the brunt of the cuts. Disney placed a big bet on the format in2010 when it paid $563.2M for Playdom, only to watch the games decline in popularity as many gamers began to focus on smartphones and tablets.
Disney Interactive is laying off about 200 employees as the fallout continues from the unit’s restructuring that began last fall. The latest job cuts, which are expected to come in the next two or three weeks, were not unexpected after Jimmy Pitaro was tapped to run the division solo in November. ”This is part of Jimmy’s long-term plan to move the division into the black,” an insider told me today. Previously, Disney Interactive laid off 50 employees in September 2012, when the unit sported about 2,000 employees. Pitaro was co-president of Disney Interactive with John Pleasants before the unit’s Games and Media divisions were merged and Pleasants exited. The pair were installed in 2010, when Bob Iger brought in Pleasants to run the games biz and the social gaming acquisition Playdom alongside Pitaro, who came from Yahoo to head digital media at Disney Online. The layoffs come despite the success of the Disney Infinity multiverse game, which after delays launched in August 2013.
Last April, Walt Disney Studios laid off about 150 as part of a broader reorganization affecting other divisions. The restructure comes as a result of an internal review ordered in late 2012 by CEO Bob Iger and CFO Jay Rasulo to pinpoint superfluous positions and increase efficiency.
Disney Interactive‘s Jimmy Pitaro will step up to helm the Games and Media operating group solo as his former co-president John Pleasants exits his post, the company announced today. Pleasants will stay on as a consultant as Pitaro is upped to President of Disney Interactive, merging both the games and media units into one. The pair were installed in their split co-presidency in 2010, when Bob Iger brought Pleasants to run games biz and Disney’s social gaming acquisition Playdom alongside Pitaro, who came from Yahoo to head digital media at Disney Online. Fast forward three years and web and mobile initiatives have converged at the studio. Despite the recent success of Pleasants’ 1M-unit selling Disney Infinity multiverse game, there could only be one at the helm of Disney Interactive. “Following three years of consistent operating improvement at Disney Interactive and a great partnership between John and Jimmy, we are now in a position to fulfill our original objective to consolidate our Interactive business under one Los Angeles-based leader,” said Iger in a statement. “With Jimmy and John’s input, we have created an Interactive organization that is best structured to meet the demands of the fast-moving technology industry. I thank John for his many contributions to Disney Interactive including building tentpole products like Disney Infinity and establishing the company as a leading mobile games publisher and appreciate his passion …
The highly promoted videogame had been targeted for June to coincide with the release of Monsters University. Disney Infinity will include a host of Disney characters including Jack Sparrow from Pirates of the Caribbean, Buzz Lightyear from Toy Story as well as members of The Incredibles. Players personalize the game by collecting characters, vehicles, and gadgets and saving them to a virtual Toy Box they use in the game — sort of like Activision Blizzard’s Skylanders which has generated more than $1 billion in sales since its 2011 arrival, according to the New York Times. Disney Interactive Co-President John Pleasants told the NYT that retailers had pushed for an introduction date closer to the holiday season. The August 18 rollout means much less of the major release of the game will be counted in Disney’s fiscal year that ends in September. The interactive unit, which also includes Disney’s web and mobile platforms, hasn’t had a profitable year since it was formed in 2008. It generated $9 million in operating income on $291 million in revenue last quarter.
More than 50 employees at Disney Interactive lost their jobs today in what is being termed a restructuring within the online unit of the organization. A source close to the situation confirmed that the restructuring was completed Wednesday. Approximately 3% of the online unit of about 2,000 people were affected. Another person familiar with events said notification was given to employees today. The layoffs are occurring within the online unit at Disney Interactive only; there were no cuts at the organization’s Games group, which develops video games like the Disney Epic Mickey franchise. The online unit handles company properties like Disney.com; as well as Moms and Family properties like the recently acquired Babble, which Disney bought last November; and Spoonful.com among others. Today’s action was a necessary restructuring as part of the division’s plans to remain competitive, according to a source familiar with internal discussions. This is the second such round of layoffs at Disney Interactive in less than two years. In January 2011, the division laid off about 200 employees in what was then called “a reorganization.”
BURBANK, Calif.–The Walt Disney Company (NYSE: DIS), through its wholly owned subsidiary Disney Online, has acquired Babble Media, Inc., a leading online parenting platform featuring more than 200 influential mom bloggers. The acquisition of Babble further strengthens the position of Disney Interactive Media Group’s Moms and Family portfolio as a leading online resource for moms and families.
The companies announced this morning that Disney will bring “family-friendly video entertainment” to Google’s video site as well as Disney.com beginning early in 2012. ”Programming will include video drawn from relevant family-friendly content currently available across YouTube, original video produced by Disney, as well as a blend of current Disney Interactive original series, select Disney Channel programming and Disney user created content,” the companies said. First up in February will be an original video series based on Disney’s hit mobile game “Where’s My Water?” and its main character Swampy. “With online video consumption exploding and YouTube at the center of that trend, we see an opportunity for Disney Interactive and YouTube to bring Disney’s legacy of storytelling to a new generation of families and Disney enthusiasts on the platforms they prefer,” Disney Interactive co-precsident Jimmy Pitaro says. YouTube’s Global Head of Content Partnerships Robert Kyncl says his operation has 800 million users worldwide.