Disney Interactive to Cut Workforce

The gaming industry has seen its ups and downs, and Disney Interactive has experienced more downs of late. The Walt Disney Co. is apparently plotting another round of layoffs at its video game and digital media division, according to a source who spoke to the Los Angeles Times.

Disney LogoThe layoffs are expected to affect several hundred people, notes The Wall Street Journal, and would follow other recent cuts in the division. Early last year, for example, Disney Interactive laid off 50 people and shuttered Junction Point Studios, the Austin, Texas-based developer that created the Epic Mickey games. As a part of a transition at the division, Disney Interactive let its co-president, John Pleasants, go in November.

Not only has Disney Interactive been cutting its games staff, but the corporate parent closed its LucasArts game studio last year, as well.

Game Companies Play the Layoff Card

Disney is far from being alone in slicing its games workforce. Struggling social games maker Zynga cut 18 percent of its staff last year and announced plans to cut another 15 percent last month.

Games behemoth Electronic Arts is also apparently trimming down, reducing its staff in the United Kingdom at its Ghost Games studio, reports IGN. The size of those cuts was not released but the publication says it hears programmers were offered jobs on other EA titles.

Better Times Ahead for Disney Interactive?

While reportedly eyeing layoffs, Disney Interactive did manage to stem its financial hemorrhaging. Yesterday, the Walt Disney Co. reported first quarter revenues for fiscal 2014, of which its Disney Interactive unit generated $403 million – a 38 percent jump compared with the year before. Operating income for the segment increased to $55 million in the quarter, compared with $9 million a year ago.

Walt Disney said the higher operating income was due to an increase in its console game business, driven by the success of Disney Infinity, a game it launched in August. That performance bodes well compared to its performance between 2008 and 2012, when it racked up more than $200 million in losses annually.

Disney Interactive, meanwhile, declined to comment on the pending layoffs and an official at the California Employment Development Department noted that Disney Interactive has not notified the agency of any layoffs this year.

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