Disney Interactive Media cuts up to 50 percent of workforce

by Steven Mostyn - Jan 26 2011, 11:33

Sweeping restructuring plans revealed this week by the Walt Disney Company are likely to arrive as nothing but bad news for a significant chunk of the employees toiling under the Disney Interactive Media umbrella.

More pointedly, up to 50 percent of the people at the 700-strong company are expected to lose their jobs after Disney co-presidents John Pleasants and James Pitaro outlined a cost-cutting plan to stem the flow of cash leaking from the videogame and online divisions.

“Reorganizations require very difficult decision and this one is no different,” outlined the co-presidents in an email dispatched to employees on Monday. “We much continuously evaluate our structure and organization and its needs in order to make Disney’s digital content and businesses even more robust and successful.”

Disney’s decision to wield the axe of unemployment comes after a year that saw a procession of poorly received videogames emerge from its Interactive Media arm (i.e., the likes of Tron: Evolution, Split/Second, and Tangled: The Video Game).

In something of a portentous move, Disney Interactive Media shuttered Vancouver-based developer Propaganda Games (Tron: Evolution) earlier in January. 

And, according to people familiar with Disney’s future plans, the job losses at Disney Interactive Media represent only the first wave of cuts and more are expected to follow throughout 2011.

The restructuring plan comes despite the recent sales success of Wii-exclusive videogame Epic Mickey, which sold 1.3 million units during its first month of release (from November 30).

During the last three fiscal years, Disney’s digital media group posted revenue of $2.2 billion USD and a net loss of $787 million USD.

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