Pixar, well-known for beloved films like “Toy Story”, “Monsters, Inc.” and “The Incredibles”, announced that it was laying off about 175 workers, constituting 14% of its total headcount. This comes after Disney laid off some 7,000 staff worldwide last year in two stages in a bid to save cost.
Pixar president Jim Morris stated in a memo to staff that Pixar was going to refocus on making feature films, and the reduction in headcount was going to be part of the move away from series production on Disney+. The layoffs are part of Disney CEO Bob Iger’s overarching mandate to focus on quality over quantity, which means scaling back streaming, which he says has been stretching the creative teams too thin.
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Streaming Services A Race To The Bottom
Many production studios moved to release movies on streaming services during the pandemic. Since people were unable to go to the theatres, streaming services provided the only hope of making revenue during the pandemic.
However, streaming services are plagued with issues such as password-sharing, as well as the fact that it works on a subscription-based model for the service rather than payments for each individual show, making it difficult to monetise.
In 2020 during the pandemic, Pixar (along with other Disney studios) was producing original shows for Disney+ as Disney invested heavily to attract subscribers to its own streaming service. However, these efforts have not been successful, only getting 154 million subscribers, which is still far from its 260 million target.
Streaming services have just not been as profitable as Disney had hoped, and while it was the only way to make revenue during COVID, that has since changed with audiences now free to return to the theatres.
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People Are Not Turning Up To Theatres
The movie industry was hit hard during COVID-19, where audiences worldwide were unable to physically go to the movie theatres to watch movies. This had trickle-down effects not just on the movie theatres itself, but the production studios, actors, and Hollywood in general.
While the world welcomed movies like Top Gun: Maverick, Barbie and Oppenheimer post-COVID, the movie industry has still failed to entice audiences to go back to the theatres. This can be seen in box office numbers where Barbie, the top box office film for 2023, only managed to earn $1.4 billion, only about half of Avengers Endgame, which grossed $2.8 billion in 2019.
Source: Boxofficemojo.com
A comparison of the top 10 movies in 2019 versus 2023 shows the top 10 with roughly half the revenue of their 2019 counterparts. In addition to this, only the top 2 movies made more than $1 billion, whereas the top 9 movies in 2019 made more than $1 billion.
The poor general movie theatre attendance has similarly affected Pixar, with “Lightyear” (2022), a “Toy Story” Spinoff, earning just $118 million, only a fraction of the $434 million that Toy Story 4 earned in 2019.
Source: Boxofficemojo.com
Pixar’s poor box office performance comes on the back of poor movie theatre attendance across the industry. “Elemental”, “Soul” and “Turning Red” were previously released on Disney+ during the pandemic, resulting in the poor viewership numbers when it was finally released in the theatres.
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Job Cuts Part Of Wider Industry Layoffs
The layoffs in Pixar comes on the heels of other layoffs in Hollywood, with Warner Bros., Discovery and Paramount Global all having made major staff reductions.
Marvel and Lucasfilm, both beloved Disney properties, were not spared from the layoffs either, with the latter winding down its Singapore operations in 2023, culling some 300 staff.
Streaming services are also similarly affected, and Netflix retrenched some 300 staff last year.
Aside from this, gaming studios have also been laying off staff, with companies like Sony Interactive Entertainment, Electronic Arts, Sega and Activision Blizzard laying off staff early this year. While the gaming industry faced slightly different pressures from the rest of the entertainment industry, it was similarly affected by the post-pandemic slowdown once the COVID restrictions eased.
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