Pixar Animation Studios recently announced that it is firing roughly 14 percent of its workforce amid drastic budget cuts at the Walt Disney Company. The reduction in headcount translates to the elimination of 175 jobs, correlating with a pullback in the number of entertainment offerings the parent company is releasing on its streaming platform Disney+.
Prior reports indicated that Pixar would lay off as much as 20 percent of its staff. Furthermore, the prominent animation studio cut 75 jobs earlier this year, including two executive positions. Disney CEO Bob Iger noted that the entertainment giant had significantly overspent on streaming content, resulting in billions in losses.
“As we got into the streaming business in a very, very aggressive way, we tried to tell too many stories,” Iger told investors during a recent earnings call. “Basically, we invested too much, way ahead of possible returns. It’s what led to streaming ending up as a $4 billion loss.” He added, “We tried to tell too many stories.”
Moreover, The American Tribune reported earlier this month that Disney’s stock had tanked after a disappointing earnings report where forward guidance from the company fell short of investor expectations. Subsequently, shares tumbled. The Tribune reported:
Disney’s earnings before taxes came in at $657 million in Q2, representing a 69% decline from the prior year, which saw $2.1 billion in pretax income during the second quarter. Despite the concerning decrease in this metric, other reported liquidity figures showed promise. Cash flow from operations saw a 13% increase to $3.7 billion, and free cash flow jumped 21% to $2.4 billion year-over-year.
Despite falling short of Wall Street expectations, Iger explained that he anticipates “renewed strength” across Disney’s business. “As we build for the future, the steps we are taking today lend themselves to solidifying Disney’s place as the preeminent creator of global content,” the CEO said. “Looking at the renewed strength of all of our businesses this quarter — from Sports, to Entertainment, to Experiences — we believe the stage is now set for significant growth and success, including ample opportunity to increase shareholder returns as our earnings and free cash flow continue to grow.”
Conservatives have blasted Disney over the seeming woke agenda it has inserted into its entertainment offerings in recent years. The company has even labeled its political and social activism as a potential “risk factor” to future performance. Further reports indicate that Disney has endured nearly $900 million in losses relating to its last eight theatrical releases, which many blamed on the company’s blending of politics and entertainment.
Iger has addressed these concerns about Disney incorporating politics in its content, maintaining that its priority is to entertain the audience. “I’ve been preaching this for a long time at the company before I left and since I came back that our No. 1 goal is to entertain. I think, like, the term woke is thrown around rather liberally, no pun intended in that regard. I think a lot of people don’t even understand really what it means,” he said. “The bottom line is that infusing messaging as a sort of No. 1 priority in our films and TV shows is not what we’re up to. They need to be entertaining.”
However, he noted that Disney intends to reach a more diverse audience, stating, “And on one hand, in order to do that, the stories you tell have to really reflect the audience that you’re trying to reach. But that audience, because they are so diverse, really first and foremost, they want to be entertained.” Watch Megan Kelly criticize Disney for being “woke” below:
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