Legendary animation company Pixar is expected to lay off a significant portion of its workforce in 2024—up to 20%, according to insiders. The actions are the most recent setback for Pixar’s creative team as parent company Disney continues to put streaming revenue ahead of artistic integrity.
Budgets for Pixar teams, who were already overworked creating content for the failing Disney+, are being further cut. As seasoned talent is let go, morale collapses. Despite all that, Disney CEO Bob Iger pushes through plans to slash $5.5 billion in costs and 7,000 jobs across the board, penalizing beloved brands like Pixar in the process.
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Insiders claim that part of the headcount laid off at Pixar was employed for Disney+, the streaming division that Iger pressured Pixar to produce content for but hasn’t yet made a profit. Disney+ topped analysts’ projections of 148.15 million subscribers in Q4 by adding 7 million new members, bringing its total to 150.2 million, including Iger’s newest add-on ‘Disney+ Hotstar’. Over half of all new U.S. customers chose an ad-supported product, and as a result, Disney+’s ad-supported customer base increased by 2 million to 5.2 million.
Disney CEO Bob Iger told investors during earnings that the company’s “restructuring” “enabled tremendous efficiencies” and that as a result, the streaming service should turn a profit by Q4 2024. It has also been reducing its losses from streaming. Disney+ lost almost $1.5 billion as of Q42022; in Q4023, it lost “only” $387 million.
The layoffs specifically target Pixar employees hired to create Disney+ projects, exposing the financial strain of Iger’s struggling streaming gambit. Despite adding millions of subscribers, Disney+ continues to lose nearly $400 million per quarter. “Elemental” from Pixar was mentioned among the well-liked movies that debuted on streaming services during the quarter, along with movies from Disney and Marvel like “Soul” and “Guardians of the Galaxy Vol. 3.”
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“Elemental” had grossed half a billion worldwide, Disney said and was the most-viewed film on Disney+ in the quarter, but was initially considered a box office bomb and one of the worst debuts in Pixar’s 28-year history. Over time, the movie made up for its weak premiere, but it came out after other poorly received movies like “Lightyear” and “Onward,” which made Disney reevaluate its release plan. Pixar veterans lament the cost-cutting culture now engulfing the once-insulated studio. Creatives face increasing pressure to deliver quantity over quality, churning out Disney+ content on a breakneck production schedule. Many insiders predict an exodus of top talent dismayed at Pixar’s changing culture under Iger’s regime.
Earlier in 2023, Pixar announced the layoff of 75 employees, including two executives responsible for “Lightyear,” according to Reuters. Among them were longtime Pixar animators Galyn Susman, who had worked on “Toy Story 4,” and Angus MacLane, who had animated “Toy Story.” According to the report, Iger planned to cut costs by $5.5 billion and headcount by 7,000 jobs. In an effort to strengthen its streaming division, Disney+ will also acquire Hulu content in the United States this year. This move is similar to other consolidations among its competitors, such as the Warner Bros. and Discovery merger and the speculated Paramount merger.
The layoffs follow a series of underwhelming Pixar theatrical releases as Disney trains audiences to expect Pixar’s best on its streaming platform. Yet declining box office revenues make costly animated features difficult to justify without streaming subsidy. Pixar now faces a precarious future – struggling to reclaim theatrical glory while increasingly beholden to Disney’s flailing streaming business. More layoffs seem inevitable as long as Disney prioritizes streaming above all else, no matter the collateral damage.
What do you think Bob Iger and Disney have in mind for the fledgling animation studio? Any thoughts on Pixar’s box-office flops recently? Let us know in the comments!
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