Disney's Pixar lays off 14% of its staff

Long-awaited layoffs will hit Pixar Animation Studios on Tuesday.

Pixar will lay off about 175 employees, or about 14% of the studio's workforce, according to a spokesperson for the parent company. walt disney he told CNBC. The cuts come as CEO Bob Iger works to fulfill his overall mandate to focus on the quality of its content, not the quantity.

Layoffs hit other Disney companies last year, but Pixar's cuts were delayed due to production schedules. It was initially reported that 20% of the animation studio's employees would be laid off.

Iger, who returned to the CEO role in late 2022, has been working to turn around the company's box office woes, driven by both the company's content decisions and pandemic shutdowns. While Disney has had mixed box office success with several franchises, including the Marvel Cinematic Universe, the company has found it difficult to make its animated films resonate with audiences.

When theaters closed during the pandemic, Disney sought to fill the company's fledgling streaming service, Disney+, with content, expanding its creative teams and sending theatrical films directly to digital.

The decision trained parents to look for new Disney titles on streaming, not in theaters, even as Disney opted to return its movies to the big screen. Compounding Disney's problems, many audience members began to feel that the company's content had become too existential and too concerned with social issues beyond the reach of children.

As a result, no animated film from Disney, Pixar or Walt Disney Animation, has generated more than $480 million at the global box office since 2019. By comparison, just before the pandemic, “Coco” generated $796 million globally. worldwide, while “Incredibles 2” grossed $1.24 billion worldwide, and “Toy Story 4” grossed $1.07 billion worldwide.

With Iger back at the helm, Pixar will refocus on theatrical releases and move away from short series for Disney+.

— CNBC's Julia Boorstin contributed to this report.