Disney Interactive Lays Off 700 Employees

Disney Interactive Lays Off 700 Employees

Disney Interactive is eliminating 700 jobs, about 26% of its total workforce, as the Mouse House’s games and Internet division struggles to achieve profitability.

The cuts were expected, and were anticipated to mostly affect Disney’s Playdom group, which produces games for social-media platforms. A Disney rep said the layoffs will occur across the board in the business unit.

With the restructuring, Disney Interactive will develop “significantly fewer” mobile and social games in-house, and other games will be licensed from development partners, according to a rep.

“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,” the company 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 layoffs come amid the success of “Disney Infinity,” which combines physical figures and videogames to let players create their own virtual worlds. The company has sold more than 3 million copies since “Disney Infinity” debuted in August 2013.

Disney Interactive is headed by prexy Jimmy Pitaro. Last fall, John Pleasants stepped down as co-president, after leading the launch of “Disney Infinity.”

Disney Interactive also runs Disney.com and other websites. With the restructuring, Disney will shut down BabyZone, a blog site for new moms, and Spoonful, a blog about food and crafts. In addition, it will pull the plug on Playdom games Sorority Life and Alice in Wonderland. The unit’s mobile games include “Where’s My Water?” and “Where’s My Mickey?”; its Tap Tap Revenge mobile games will be eliminated.

Disney purchased Playdom in 2010 for $563 million. The company has struggled to establish successful social games franchises since then, although “Marvel: Avengers Alliance” has performed well with 3.9 million fans on Facebook.

Financial results of Disney Interactive have been improving. For the Mouse House’s fiscal quarter ended Dec. 28, 2013, the Interactive unit posted revenue of $408 million (up 38% from the year prior) and operating income of $55 million versus $9 million a year earlier. For the fiscal year ended in September, Disney Interactive generated revenue $1.1 billion, up 26%, with an operating loss of $87 million compared with an operating loss of $216 million for fiscal 2012.

Along with the layoffs, Disney Interactive will close offices in Chicago, New Jersey, Colorado, South Korea and Hyderabad, India.

In 2012, Disney Interactive laid off 50 employees when it shut down Austin, Texas-based game studio Junction Point, which created “Epic Mickey.” That came after 200 employees were let go in January 2011.

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  1. Linda Abidin says:

    It has been nearly 5 years since Disney shut down one of the best games ever, My Vineyard!…there is still a huge group of us former players on Face Book, that keep in contact and wonder if there will ever be a time when this beloved game will become available once again…shameful how a company as big as Disney is can do this to loyal customers and have no regard.Letters and e-mails to them just seemed to fall on deaf ears. The least they could do, if they are not going to ever bring it back to the public is sell the rights to another developer who would be interested! We still miss it!… it was that good!

  2. Chris Valle says:

    Disney mismanaged their whole situation, taking extremely popular games like Mobsters and running them into the ground. Disney is one of the most influential companies in the world and failed to use their power and influence to keep MySpace the way it was, they failed to acknowledge game issues and they couldn’t be bothered to host their apps. Millions of active accounts gone over night and just as many upset customers…how can anyone be surprised at the failure to profit when you upset so many customers at once.

  3. Sharon says:

    I play GoT on facebook. I clicked on the question mark on the inner circle page and was happy to read there are new things on the way. I’ll wait and see what happens…you have peaked my curiosity.

  4. I too will never again purchase another Disney product, not will I take my kids and grandkids to any Disney site. The way they shut down GOT is disgusting to me.

  5. david says:

    i will never play another game that disney puts out because your only here for the money not for the players.

  6. Barry Clarke says:

    For a company that perports to be for the people Disney has finally proved that their only requirement is profit (ie money ), why did they buy playdom who gave people the option of playing for free (although plenty paid anyway ) and thought they could profit, the mind boggles, perhaps in the long term they will damage themselves, I for one will scrap all thoughts of kids/grandkids going to Disneyland as I have no respect for a company that works to those sorts of rules. I sincerley hope the Playdom People can resurrect those games in the future privately as I have many friends and colleagues that this game over the years has provided me with.

  7. Vicky says:

    DISNEY IS JUST PLAIN GREEDY…..

  8. Debbie says:

    Disney has not run Playdom worth a crap since they took over. They have added things that never work, charge differing prices to people for the same item (chapter). Maybe just maybe if they actually had a decent support service and fix glitches in a timely basis they would not have alienated so many players. I have played Garden of Times for 3 years and still love to play the game. Gives me social interaction and something to do when I am housebound. I do hope they keep the game, or better yet, sell it to a company that knows how to run a gaming site!

  9. Karen Rust says:

    I play several games on Face Book and my most favorite is Gardens of Time. Have played it ever since it started and keeps getting better and more interesting all the time. However , when we have a glitch , which I have had for three months now, they are unable to fix it, when before , things were pretty much fixed in a week or less. Is the lay off the reason that is causing the people at Playdom unable to take care of all their customers. You have a great thing going with Gardens of Time, so think you had better make sure you dont start losing players, we buy lots of gold for that game.

  10. cutealien says:

    I play at playdom.com, a recent refugee from the same game at fb when I closed my fb account. Mostly Disney is incompetent. The site has millions of players and, judging by the forums, a large number of rabid addicts, as was also the case at fb. How can that be unprofitable?

    • James says:

      Every time there is a leadership change, the first goal at Disney Interactive is to destroy everything that the last guy was doing.

      Here’s a tip: Improving the existing properties are a quicker path to “profitability” than destroying everything that’s already there. And you’d avoid the millions of angry former players, who wouldn’t dare to play the new games. The on-going problem is Disney Interactive has to wait for a new generation of users — who havn’t had their heart’s broken by some favorite going offline.

      If the parks were run like this, today, Walt Disney World would be a broken carousel and a parking lot.

  11. knghtshingrmour says:

    Achieve profit is a BS excuse.
    http://articles.latimes.com/2014/feb/05/entertainment/la-et-ct-disney-profit-up-on-movies-thor-frozen-20140205
    their profit is up 33% by killing American jobs

  12. Gitin says:

    Its Bangalore, India. Playdom was never in Hyderabad!!

  13. Barry M says:

    Hope & Change rolls on. I tell everyone I know to avoid Obamo-TV and Hollywood. Disney spews filtth and poor Walt is spinning in his grave and cryogenic chamber.

    • Smooth says:

      Tell your wingnut reps in congress to stop turn down raising the minimum wage and maybe people will have money to buy these products. I bet that you see Obama’s face in your coffee cup. If you had a life you wouldn’t have time to think about him so much. Just a thought.

  14. Yirmin says:

    Not surprising. Their video game unit upset quite a few folks last year when they suddenly decided to eliminate their Pirates and Toontown online games… It left a bad taste in a lot of mouths to the point that my own kids told me they didn’t want to get the Infinity game because they were mad at Disney… To me it was a good thing… no more monthly charges and now I don’t have to buy the overpriced Infinity junk…

    But it showed the stupidity of the game divisions management, because they closed to online games that could have been run for much less money and remained small cash cows… Instead they were saddled with excessive corporate overhead that gave the illusion that they weren’t profitable… Not sure how anyone can claim any online game that has monthly subscribers can be unprofitable when the price of servers is as low as it currently is especially when they hadn’t made any upgrade to either game in years.

    The Disney management is incompetent.

    • James says:

      Agree with Yirmin in many respects. My own kids were heartbroken over them closing the Virtual Magic Kingdom online world. Still are, years later.

      I don’t understand the closure of Spoonful (unless the spun-off Family Fun magazine wanted to buy the unit). It’s traffic is strong and increasing: http://www.alexa.com/siteinfo/spoonful.com.

      Disney’s Interactive unit keeps seizing failure from the jaws of victory. Bizarre.

    • tsk tsk says:

      Yirmin, you’re an idiot – what excessive corporate overhead? Disney’s stock is higher than it’s ever been dumb ass.

  15. Chelsea says:

    Wow 700 people unemployed that is not right. :(

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