Walt Disney, once said welcome “to all that come to this happy place”; but nowadays Disney’s Interactive unit is not a happy place anymore, because of the hundreds of job cuts that threaten employees. Some of the unit’s 3,000 workers are on the verge of losing their jobs and the announcement could come this week, according to an insider.
Robert A. Iger, Disney’s chairman and CEO, told analysts that the company’s goal in 2013 was Disney Interactive’s profitability, but this unit is reportedly losing money because of a purchase the enterprise made back in 2010. Four years ago, Disney bought Playdom for $563 million, but the company has been struggling to make profit ever since. As a result, Jimmy Pitaro, the group’s president who replaced co-president John Pleasants, reportedly told employees that Disney Interactive unit will be reorganized, causing the latter to think that Disney may no longer be a happy place anymore since a wave of hundreds of job cuts is expected in the near future.
However, Disney Interactive’s job cuts started from top to bottom; co-president John Pleasants parted with the enterprise in November 2013, a few months after “Disney Infinity” video game became highly successful, a product which includes plastic toys that can also be used on an electronic base in order to change the virtual action. It sold over three million copies and boosted Disney’s revenue, but the Interactive unit still remains the only segment which loses money.
In the most recent fiscal year, Disney Interactive’s $87 million operating loss forced the executives to continue the series of layoffs started a few years ago. In 2013, this unit cut hundreds of jobs when closing Junction Point Studio and Propaganda Games, which seemingly made employees believe that Disney was not a happy place anymore.
Apart from Playdom, Disney Interactive also runs Disney.com and has created the popular franchises “Where’s my Water?” and “Where’s my Mickey?” as well as the successful “Marvel: Avengers Alliance.” Although these mobile games helped the unit register an operating income of $16 million, the division is still struggling to catch up with units like parks and resorts, media networks, studio entertainment and consumer products.
Before leaving Disney Interactive, Pleasants told reporters that Playdom was “still challenged” and mentioned that he “could have been maybe a little more aggressive.” The unit’s big success, “Infinity” brought Disney Interactive only the second profitable quarter in a history of five years, reason why hundreds of job cuts are reportedly about to happen. However, an insider pointed out that the state does not know anything about Disney’s plans even though in California, companies must notify the state if they plan to cut a large number of jobs. Disney Interactive has not commented on the news.
Disney, the happy place once portrayed by Walt Disney is reportedly not a pleasant place anymore for hundreds of employees after Interactive unit could cut their jobs. Although there are no further news with regard to Playdom’s future, the company’s other divisions are going strong and Disney’s latest movie “Frozen” could generate about $1 billion in worldwide ticket sales.The new fiscal year brought the company a net income of $1.84 billion up from last year’s $1.38 billion.
By Gabriela Motroc