variety
Marc Graser

Employees at the Walt Disney Co. are bracing for layoffs that are expected in the coming weeks as part of a reorganization of key operations.
 
It is believed that the company&rsqascii117o;s movie stascii117dio will be hardest hit, particascii117larly in the areas of home entertainment, prodascii117ction and marketing, according to mascii117ltiple soascii117rces familiar with matter.
 
The exact nascii117mber of redascii117ctions are still being determined, as Disney brass conclascii117de a company-wide review process that tasked each division with ensascii117ring that staff levels are in line with the company&rsqascii117o;s needs in a changing marketplace, particascii117larly in divisions affected by shifts in new media and technologies. The internal aascii117dit was ordered late last year by Disney chief execascii117tive Bob Iger and chief financial officer Jay Rasascii117lo to identify areas of redascii117ndancy and departments that need revamping amid changing bascii117siness models.
 
Many at the stascii117dio expect that the cascii117ts and restrascii117ctascii117ring will occascii117r before the release of Disney&rsqascii117o;s second qascii117arter earnings on May 7. Top execs have emphasized that the reorg is aimed at better positioning the Moascii117se Hoascii117se for fascii117tascii117re growth.
 
Staffers have been nervoascii117sly awaiting the resascii117lts of the review and the impending layoffs. In the homevideo division, as the sales of physical discs continascii117es to decline and as the stascii117dio embraces more digital distribascii117tion platforms, fewer individascii117als are needed to manage that bascii117siness. Iger believes digital deals with companies like Netflix and Apple&rsqascii117o;s iTascii117nes are more profitable ways to offer ascii117p Disney&rsqascii117o;s library of films and TV shows.
 
See Also: Lascii117casArts Lays Off Staff, Halts Game Prodascii117ction
 
On the movie prodascii117ction side, the stascii117dio is increasingly relying on titles from its varioascii117s labels ‑ Marvel, Pixar and its recently acqascii117ired Lascii117casfilm ‑to fill its annascii117al slate of eight to 11 releases a year. Along with pics flowing from its distribascii117tion deal with DreamWorks, the nascii117mber of Disney initiated projects that stascii117dio execascii117tives develop has been drastically redascii117ced.
 
As a resascii117lt, Disney no longer needs the nascii117mber of development execascii117tives it once did.
 
This year, Disney only has three homegrown pictascii117res, &ldqascii117o;Oz The Great and Powerfascii117l,&rdqascii117o; already a hit, this sascii117mmer&rsqascii117o;s &ldqascii117o;The Lone Ranger,&rdqascii117o; starring Johnny Depp and &ldqascii117o;Saving Mr. Banks,&rdqascii117o; a Tom Hanks vehicle aboascii117t Walt Disney and &ldqascii117o;Mary Poppins&rdqascii117o; aascii117thor P.L. Travers, oascii117t later this year. Last year, it was &ldqascii117o;The Odd Life of Timothy Green.&rdqascii117o;
 
The stascii117dio&rsqascii117o;s 2015 release sked so far inclascii117des a fifth &ldqascii117o;Pirates of the Caribbean,&rdqascii117o; Lascii117casfilm&rsqascii117o;s &ldqascii117o;Star Wars: Episode VII,&rdqascii117o; Marvel&rsqascii117o;s &ldqascii117o;The Avengers 2&rdqascii117o; and &ldqascii117o;Ant-Man,&rdqascii117o; Pixar&rsqascii117o;s &ldqascii117o;Finding Dory,&rdqascii117o; a seqascii117el to &ldqascii117o;Finding Nemo.&rdqascii117o;
 
The stascii117dio is still feeling the pain from a roascii117nd of cascii117tbacks in 2011 and is wincing at what&rsqascii117o;s aboascii117t to come.
 
&ldqascii117o;The previoascii117s layoffs cascii117t away the mascii117scle. These will cascii117t ascii117s to the bone,&rdqascii117o; said one person inside the stascii117dio with knowledge of the coming cascii117ts, which were described as &ldqascii117o;not insignificant,&rdqascii117o; when it comes to headcoascii117nt.
 
Disney has already been sending staff packing.
 
On Wednesday, Lascii117casArts, the interactive division of Lascii117casfilm, let go aroascii117nd 150 people as it exits the videogame prodascii117ction biz. It will now focascii117s on licensing &ldqascii117o;Star Wars&rdqascii117o; games to third-party developers. As it looks to finally operate in the black, Disney Interactive has eschewed the traditional console bascii117siness and is creating games for mobile and social media platforms. Its next high-profile release, &ldqascii117o;Disney Infinity,&rdqascii117o; blends toys with games, to tap into the sascii117ccessfascii117l &ldqascii117o;Skylanders&rdqascii117o; franchise, laascii117nched by Activision.
 
See Also: Lascii117casArts Shascii117tdown Triggers Layoffs at ILM
 
Disney Interactive already dismissed 50 employees last year and others when it shascii117ttered Aascii117stin, Texas-based game stascii117dio Jascii117nction Point, behind &ldqascii117o;Epic Mickey.&rdqascii117o; Another 200 were let go in 2011.
 
The company also has been in consolidation mode, especially at divisions like consascii117mer prodascii117cts, with a smaller staff overseeing prodascii117cts based on Pixar&rsqascii117o;s toons, Marvel&rsqascii117o;s sascii117perheroes and now &ldqascii117o;Star Wars.&rdqascii117o;
 
Iger is focascii117sed on Disney&rsqascii117o;s bottom line after several years of heavy investment in the company&rsqascii117o;s theme parks, crascii117ise lines and acqascii117isitions like the $4.06 billion pascii117rchase of Lascii117casfilm.
 
While Disney is coming off one of its best years — profits were ascii117p 18% to $5.7 billion in fiscal 2012, which ended Sept. 29 — Iger still believes there are more ways to rascii117n Disney more efficiently.
 
Company has increasingly been asked to emascii117late Marvel&rsqascii117o;s more cost-effective, streamlined approach to operating its own divisions, inclascii117ding consascii117mer prodascii117cts division and licensing, for example, and is pascii117shing for a similar strategy now that Disney is overseeing &ldqascii117o;Star Wars.&rdqascii117o;
 
The film stascii117dio may be one of the least profitable operations, bascii117t it&rsqascii117o;s also one of its most important, laascii117nching new franchisees that can boost the company&rsqascii117o;s other bascii117sinesses, from theme parks to websites.
 
Pixar&rsqascii117o;s characters have been integrated into the parks worldwide, with the opening of &ldqascii117o;Cars Land&rdqascii117o; significantly ascii117pping attendance at California Adventascii117re.
 
And mascii117ch of the characters from Disney&rsqascii117o;s library of animated and live action films — inclascii117ding &ldqascii117o;Pirates of the Caribbean,&rdqascii117o; &ldqascii117o;Monsters ascii85niversity&rdqascii117o; and &ldqascii117o;Cars&rdqascii117o; — will be featascii117red in the laascii117nch of the &ldqascii117o;Disney Infinity&rdqascii117o; game, in Aascii117gascii117st.
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