Disney-owned animated production house Pixar will undergo layoffs in 2024. According to TechCrunch, the layoffs may be as high as 20%. This would remove over 300 employees from the studio, bringing down the staff under 1000. Disney has confirmed this news. However, some Pixar representatives believe that this number is too high.
This scenario emerges from Disney’s decision to generate less content and focus more on the quality of the content. In addition, the production house wants to focus more on the Disney+ streaming service. The studio wants to decrease the loss suffered by the streaming platform in the last two years. In Q4 2022, Disney+ lost over $1.5 billion. This figure improved significantly in Q4 2023, with a loss of $387 million. Disney expects the streaming service to turn profitable by the end of the last quarter of 2024.
One of the factors that contributed significantly to Pixar’s downfall was the change in audience preferences and behaviour. For instance, the pre-established IPs did not need significant consumer buy-ins and large-scale marketing efforts to lure viewers into theatres in the 2010s. In addition, viewers are now tired of watching sequels or spinoff projects.
Disney’s decision to reduce Pixar’s content also emerges from the mammoth budgets of the studio’s animated projects. On average, the studio spends nearly $200 million per film. On the other hand, Illumination is known to deliver animated projects within the production budget of $75-100 million. A project with a significant budget of $200 million needs high box office returns to turn into a profit. Stay tuned for more updates.