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Pixar to make significant job cuts this year as spending on Disney+ originals reduced

Pixar’s recent film releases include last year’s Elemental

California-headquartered animation studio Pixar will make lay-offs later this year as its parent company, Disney, continues to cut back spending on Disney+ originals.

According to a report in TechCrunch, Pixar is looking at trimming its headcount by as much as 20% later in the year, meaning the team would shrink from around 1,300 to less than 1,000. However, Pixar has since pushed back, confirming that lay-offs will be made but the total number is still being decided.

Many of the axed positions will be those working on Disney+ originals, with Pixar having recently wrapped production on several titles for the streamer, including Win or Lose.

On the film side, Pixar’s recent releases include 2023’s Elemental and 2022’s Lightyear and Turning Red, all of which have struggled or underperformed in one way or another at the box office. Its upcoming slate for 2025 includes a sequel to Inside Out and sci-fi adventure Elio.

Disney, like most of its studio rivals, poured billions of dollars into launching a streaming platform that could compete with Netflix, but has reduced its investment as it looks to achieve streaming profitability.

In its most recent quarter, Disney reported a direct-to-consumer segment loss of US$387m, compared with US$1.47bn the prior year.

The company has consistently stated that its streaming business will be profitable by the end of 2024. Ampere Analysis has projected that it may reach profitability sooner than that, with the London-based research firm predicting it could turn a profit in the first quarter. Disney is set to report its Q1 earnings in early February.

In November, Disney said it would reduce its content spend to around US$25bn in 2024, down from around US$27bn in 2023. Close to 40% of its annual content spend goes on sports content and rights, meaning around US$10bn of the US$25bn would go towards that while the remaining US$15bn will be spent on entertainment content.

Last February, Disney revealed plans to achieve around US$5.5bn in savings, including cutting around 7,000 jobs. In the midst of those cuts, around 75 Pixar roles were eliminated.

Two months ago, Disney said it had exceeded its initial estimate and cut around 8,000 positions. It also increased its cost savings target to US$7.5bn from US$5.5bn. Within that, Disney said it would find US$4.5bn in content-related savings, compared to its initial goal of US$3bn.

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