Disney Interactive announced today that it is cutting 700 jobs, roughly 26% of it’s global staff. The New York Times broke the news today, which follows a Wall Street Journal report from a month ago, stating that Disney Interactive planned to layoff a major portion of it’s 3000 strong workforce.
“These are large-scale changes as we focus not just on getting to profitability but sustained profitability and scalability,” said James A. Pitaro, the president of Disney Interactive, in an interview with The New York Times. “We’re not exiting any businesses, and we will pursue licensing partnerships in which we retain a lot of creative input. But this is a doubling down on mobile and an effort to focus much more intently on a core set of priorities.”
A major portion of these layoffs reportedly effect Disney’s mobile, social, and web-based game business. They plan on pursuing more licensed games, rather then building more games in house. This plan has already shown signs of working, as the division finally turned a profit this past year, following the launch of Disney Infinity.
Today’s layoffs seem to be an admission of failure on Disney’s part. In 2010, Disney purchased Playdom, a social game developer, for $563 million. The acquisition was made during the time that games like Farmville and Mafia Wars were taking over Facebook’s everywhere. Facebook’s gaming business has stagnated and shrunk in the years following, and Playdom has not had one massive success.
by, Bobby Marquardt