Disney Interactive to Lay Off Several Hundred People To Reach Profitability

In the effort to move into profitability, Disney Interactive will lay off several hundred people in the coming days. According to The Wall Street Journal the lay offs are expected this Wednesday ahead of the financial results to be released.

Disney Interactive is the arm of The Walt Disney Company which oversees the online and interactive media properties owned by Disney with its 3,000 employees. Business units include Disney Interactive Studios, Disney Online Studios, Disney Online, Disney Mobile and Playdom which is expected to be hit the hardest in layoffs.

Playdom is the social gaming developer for Disney Interactive which was purchased for $563 million in 2010 and has proven to be a struggling branch of the company. Business Insider was telling tales of Playdom’s woes as its growth stalled alongside Playfish and Zynga. Playdom was helmed by John Pleasants who later exited the company in November after serving as co-president of Disney Interactive with Jimmy Pitaro.

According to the Wall Street Journal President Jimmy Pitaro, who has been the sole leader for the division, has made it clear in an internal announcement that the company would be reorganized and senior executives would be shuffled around.

This is not the first time lay offs have hit the company. As The Inquisitr has reported previously, Disney Interactive has shuttered studios such as Junction Point who developed Epic Mickey and LucasArts.

Disney Interactive Studios is best known for its publishing of Kingdom Hearts, Epic Mickey and more recently Disney Infinity. Despite these strong brands, the company has not had a profitable financial year and only two profitable quarters. Robert Iger, Disney’s Chief Exec and Chairman, set a goal that the division would have a profitable year by the end of Sept 28th, 2013 which it missed due to the delay in Disney Infinity’s launch. When Disney Infinity did launch it put the studio in the black by $16 million with $396 million of revenue.

The lay offs are being made in spite of Disney Infinity being the 10th best selling game in 2013 and the 3rd best selling franchise with only a 3 full months on the store shelves according to the NPD, the market sales research firm. At $74.99, the starter packs have sold over 3 million units. Disney Interactive plans to continue investing in the platform with new figurines being planned around the Marvel and Star Wars universes.