A massive studio now announces unexpected layoffs in California amounting to 14% of its workforce, or 175 employees.
Long-expected layoffs are hitting Pixar Animation Studios on Tuesday.
Pixar will lay off about 175 employees, or around 14% of the studio’s workforce, a spokesperson for parent company Walt Disney told CNBC.
The cuts come as CEO Bob Iger works toward his overarching mandate to focus on the quality of its content, not the quantity, the outlet reports.
Layoffs hit other Disney businesses last year, but Pixar’s cuts were delayed because of production schedules.
Initially, it was reported that 20% of the animation studio’s employees would be laid off, not 14%.
Iger, who returned as CEO in late 2022, has been working to reverse the company’s box office woes, spurred both by the company’s content decisions and pandemic shutdowns.
While Disney has seen mixed box office success with several franchises, including the Marvel Cinematic Universe, the company has found it challenging to get its animated features to resonate with audiences, per CNBC.
“When theaters closed during the pandemic, Disney sought to pad the company’s fledgling streaming service Disney+ with content, stretching its creative teams thin and sending theatrical movies straight to digital.
The decision trained parents to seek out new Disney titles on streaming, not theaters, even when Disney opted to return its films to the big screen.
Compounding Disney’s woes, many audience members began to feel that the company’s content had grown overly existential and too concerned with social issues beyond the reach of children,” the outlet reported.
As a result, no Disney animated feature from Pixar or Walt Disney Animation has generated more than $480 million at the global box office since 2019.
“Coco” generated $796 million globally, while “Incredibles 2″ tallied $1.24 billion globally, and “Toy Story 4” snared $1.07 billion globally.
With Iger back at the helm, Pixar will refocus on theatrical releases and move away from short-form series for Disney+.
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Other Economy News Today
Applications for unemployment benefits now surge to new highs, a sign that the white-hot labor market is starting to cool off.
First-time applications for unemployment benefits rose last week to 231,000, the highest level since August, per CNN.
Thursday’s data also showed that the number of continuing claims, or applications from people who have filed for unemployment for at least one week, was 1.78 million.
That’s an increase of 17,000 from the prior week, according to the Bureau of Labor Statistics.
The latest numbers come less than a week after the monthly jobs report showed the US economy added just 175,000 positions in April, less than economists expected and a steep drop-off from prior months.
US employers have now added an average of 245,500 jobs per month, versus 2023’s 251,000-per-month average.
Still, hiring remains strong. Although the unemployment rate ticked up to 3.9% last month, it’s the 27th consecutive month that the jobless rate has held under 4%, matching a streak last seen in the late 1960s.
Weekly jobless claims data tends to be volatile but, while one week’s worth of data “does not a trend make,” said Chris Rupkey, chief economist at Fwdbonds.
“We can no longer be sure that calm seas lie ahead for the US economy if today’s weekly jobless claims are any indication.”
“Company layoffs are picking up, hinting at caution on the part of companies as they weigh the outlook for the second half of the year,” he wrote in a note Thursday.
The Federal Reserve has been battling inflation by raising its key lending rate in the hopes of slowing the economy.
While the labor market has so far resisted those efforts, remaining white hot for the past 18 months despite 11 rate hikes from the central bank, Fed Chair Jerome Powell said last week that demand has “cooled from its extremely high level of a couple of years ago.”
Ian Shepherdson at Pantheon Economics said in a note Thursday: “We’d need to see at least a month of elevated readings to convince us that the trend really has turned.”
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Also Read: A Giant Company Now Announces Unexpected Layoffs in Virginia
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