Disney layoffs coming for the company's gaming division

Disney layoffs in the hundreds are expected this week from DIsney Interactive, the company's struggling gaming division. The Disney layoffs come after several disappoing earnings reports but one highly successful video game launch.

A portrait of Epic Mickey, from Disney Interactive. Disney layoffs in the hundreds could be on the way for the company's struggling games and digital media division.

Disney Interactive is expected to begin another round of layoffs as soon as this week, according to a story first reported by the Washington Post.

The Disney layoffs come during a rocky period for the company’s struggling video games and digital media subsidiary, which lost an estimated $200 million between 2008 and 2012, according to the Los Angeles Times.

An anonymous source told the Post that the Disney Interactive layoffs could involve “several hundred people,” from a total staff of about 3,000. Variety reports that the bulk of the layoffs will come from Playdom, a division that produces games to run on social media sites, like Facebook. Disney bought Playdom in 2010 for $563 million, but it has struggled to turn out a successful game franchise during that time.

The layoff announcements are expected Wednesday, following Disney Interactive’s quarterly earnings report. They would be just the latest in a slew of recent cuts and firings: In January 2013, the company closed developer Junction Point Studios, based in Austin, Texas, laying off 50 workers in the process. In 2011, it shut down Propaganda Games, the studio for the “Tron: Evolution” video game franchise. That came with a round of approximately 200 layoffs.

Top executives at Disney Interactive haven’t been spared, either. The company parted with co-president John Pleasants this past November, despite a successful launch for the “Disney Infinity” video game a few months earlier. The game, which is available for Play Station 3 and Xbox 360 and features a roster of popular Disney characters, has sold more than 3 million copies since its August launch.

Disney Interactive can only claim two positive quarterly earnings reports over the past five, according to Variety. It lost $87 million during the 2013 fiscal year, which ended in September.

The first iteration of Disney Interactive started up in 1995 as the Disney Online Unit. In 2008, Disney merged its Disney Interactive Studios and the Walt Disney Internet group to form the Disney Interactive Media Group, which handles running the company’s websites as well as video game creation. Its divisions include Disney Interactive Studios, Disney Online, Disney Mobile, Playdom, and Disney Online Studios. 

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