Pixar is laying off 14% of its workforce as Disney scales back content

Long-expected layoffs are hitting Pixar Animation Studios today.

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 quality content, not quantity.

Layoffs hit other Disney businesses last year, but Pixar’s cuts were delayed because of production schedules. Initially, it was expected that 20% of the animation studio’s employees would be laid off.

Iger, who returned to the mantle of 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 a number of franchises, including the Marvel Cinematic Universe, its has faced a challenge getting its animated features to resonate with audiences.

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 audiences members started to feel the company’s content had grown overly existential and too concerned with social issues beyond the reach of children.

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. For comparison, just prior to the pandemic, “Coco” generated $796 million globally, “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+.

— CNBC’s Julia Boorstin contributed to this report