Disney Layoffs: Hundreds To Be Cut From Interactive-Media Unit

Tuesday, 04 Feb 2014 08:02 AM

By Clyde Hughes

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Several hundred people are expected to be laid off soon from Walt Disney Co.'s struggling interactive-media unit from reorganization, sources told the Wall Street Journal Monday.

The unit has struggled to reach profitability for the past several years, and management has laid off staff in the past to cut costs. Despite the unit's recent success with its video game "Infinity," the layoffs will take place.

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The interactive-media unit employs some 3,000 people.

Deadline.com reported Monday that the layoffs could include as many as 200 employees over the next two to three weeks. Jimmy Pitaro, the former co-president of the unit, was given full control of the Disney Interactive in November.

"This is part of Jimmy's long-term plan to move the division into the black," a source told Deadline Monday.

Disney Interactive laid off 50 people in September 2012,

The Wall Street Journal reported that Playdom, the social-gaming business Disney purchased in 2010 for $563 million, will likely take the biggest hit. John Pleasants, former co-president of the Disney Interactive, led the unit before he was pushed out.

Disney Interactive's operating income was $16 million on $396 million of revenue during its most recent quarterly filing, though it was the second quarter in five years the unit profited.

Over the past fiscal year, the unit posted revenue that rose 26 percent to $1.1 billion but still faced at an operating loss of $87 million. Disney Interactive was the only one of the company's five segments that lost money over the past fiscal year.

The Wall Street Journal reported that Disney will continue its investment into "Infinity," a combination video game and toy line that sold more than three million copies worldwide. The company spent more than $100 million developing and launching it.

An updated version of "Infinity" is being developed, which will feature Marvel superhero characters and its newly acquired Star Wars universe.

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