Why is Pixar laying off 14% of its employees?

Disney’s financial woes have resulted in the layoff of 14% of Pixar‘s employees, according to The Hollywood Reporter. The layoffs affecting about 175 Pixar workers were announced on Tues. May 21, 2024, and are part of a broader strategy to refocus the company on theatrical releases instead of streaming.

Pixar’s troubles began during the pandemic when movie theaters were closed and a series of Pixar feature films went straight to streaming, where they flopped, including Soul, Turning Red, and Luca. Disney launched its streaming service Disney Plus in 2019, and leaned heavily on Pixar to supply content for the platform. When Pixar released Lightyear in 2022 in theaters to disappointing box office numbers, the once-surefire Toy Story Pixar franchise also failed to move the needle, and the animation company was clearly in dire straits.

Since then, Disney CEO Robert A. Iger — who returned to his post in 2022 after his replacement Bob Chapek was ousted — has announced that Disney and its subsidiaries will prioritize quality over quantity, and rethink Pixar’s streaming content strategy as a means of nursing the House of Mouse back to fiscal health.

It’s not all bad news for Pixar

Not all is lost for Pixar, however: Elemental, released in 2023, made $500 million at the box office, and did well in streaming after underachieving early on, and the highly-anticipated Inside Out 2 is still set to be released on June 14. The last of Pixar’s Disney Plus content, including Cars on the Road, Dug Days, and Win or Lose, will be out in late 2024, The New York Times reported. Pixar’s Elio and Toy Story 5 are scheduled for big screens in 2026.

The May layoffs were rumored to be coming for a while, but had been delayed due to production schedules, and they were certainly not the only cuts in the Disneyverse, as Robert Iger tried to right the ship. It’s a sad day for the Pixar employees affected by the biggest cutbacks in the company’s history, but perhaps Iger’s new approach could help Pixar return to box office prominence.