Huge Layoffs at Disney Interactive

Disney has announced massive layoffs at Disney Interactive, the company’s video game and internet division. The New York Times reports around 700 people lost their jobs amounting to 26 percent of Disney Interactive’s global staff.

“These are large-scale changes as we focus not just on getting to profitability but sustained profitability and scalability,” James A. Pitaro, the president of Disney Interactive, said in an interview.

The division has been struggling and layoffs were expected, but not to this scale. They have come as the result of Disney’s decision to combine their mobile game and social game businesses, as well as scaling back their in-house game development.

On the Internet side, Disney will be closing two of its smaller websites, and

“We’re not exiting any businesses, and we will pursue licensing partnerships in which we retain a lot of creative input,” Pitaro said. “But this is a doubling down on mobile and an effort to focus much more intently on a core set of priorities.”

Last year Disney Interactive published around two dozen games in the last year, but huge losses came from Where’s My Water? 2 and Stack Rabbit. It is unclear if Disney Infinity creator Avalanche Software has been affected by the cuts with it turning a profit for the company for two straight quarters.