Massive Layoffs and Historical Restructure Hits Major Hollywood Studio

By: Sam Watanuki | Published: May 21, 2024

Pixar Animation Studios, known for its iconic animated films, is undergoing its largest restructuring ever. The studio, founded by Steve Jobs and acquired by Disney in 2006, is laying off approximately 175 employees, about 14% of its workforce.

This move is part of a broader strategy to shift focus back to high-quality feature films.

Leadership's Tough Decision

Jim Morris, Pixar’s president, announced the layoffs in a memo (via The Hollywood Reporter), acknowledging the difficulty of parting with talented colleagues. He emphasized Pixar’s commitment to supporting those affected, ensuring their departure is handled with respect and care.

An employee is packing things into a cardboard box. You can only see their arms and hands. They are wearing a suit and placing a small desk succulent plant into the box.

CIPHR Connect/Wikimedia Commons

“This is important to me, and I understand how important this is to all of us in the Pixar community,” Morris stated.

The Disney Strategy Shift

Disney CEO Bob Iger is steering the company away from the high-volume content production favored by his predecessor, Bob Chapek.

Bob Iger talking on a stage behind a podium

Source: Wikimedia Commons

Iger’s mandate is to “prioritize quality over quantity,” a move that has affected all divisions of Disney, including Pixar. This shift comes as Disney aims to refocus on its core strengths and long-term success.

Pandemic Era Setbacks

Pixar faced significant challenges during the pandemic when several of its films, including “Luca,” “Coco,” and “Turning Red,” were released directly to Disney+.

Bob Iger Announces New Rules for Passwords on Disney+

Source: Karolina Grabowska/Pexels/Trusted Reviews

This decision, made while theaters were beginning to recover, limited the films’ box office potential and affected the studio’s revenue and reputation.

Lightyear's Disappointing Performance

“Lightyear,” Pixar’s first post-COVID theatrical release, was met with lukewarm reception from both critics and audiences.

Group of People Watching in a Movie Theater

Source: Tima Miroshnichenko/Pexels

The film’s performance highlighted the studio’s struggles and intensified scrutiny on its future projects. This setback underscored the need for a strategic realignment within Pixar.

A Glimmer of Hope with "Elemental"

Despite recent challenges, Pixar experienced success with the release of “Elemental,” which earned nearly $500 million globally.

Elemental movie poster

Source: Disney

This made it the most successful original animated film for Pixar since “Coco” in 2017. The film’s success provided a much-needed boost and demonstrated Pixar’s enduring potential.


High Hopes for "Inside Out 2"

The upcoming release of “Inside Out 2” on June 14, 2024, is generating significant anticipation.

Inside Out 2 Characters

Source: Disney

The trailer has become the most-watched animated trailer in Pixar’s history, indicating strong interest from audiences. Theater owners and fans alike have high hopes for this sequel to the beloved original.


Future Projects on the Horizon

Pixar has several projects in the pipeline, including “Elio,” set to release next year, and “Toy Story 5,” planned for 2026.

A Walt Disney Studios water tower in the daytime with green palm trees beside it and a cloudy white and blue sky.

Source: Seif Abukhalaf/Unsplash

These films represent Pixar’s renewed focus on feature films and are expected to continue the studio’s legacy of creating memorable animated stories.


Industry-Wide Implications

The layoffs at Pixar are part of a broader trend within the entertainment industry.

A large, illuminated Twitch logo in white and purple dominates the photo, hanging overhead at a gaming convention

Source: Wikimedia Commons

Many studios are reevaluating their strategies and resources in response to shifting market dynamics and audience preferences. Pixar’s restructuring reflects a wider need for adaptation and innovation in Hollywood.


Employee Reactions

While the layoffs were anticipated since January, the reality has been difficult for many employees. Pixar’s leadership has communicated transparently with staff, aiming to provide support and clarity during this transition.

Source: Aquarius: WALL·E (2008)/ Disney/PIXAR/ IMDB

The studio’s commitment to its employees reportedly remains a priority during these challenging times.


Historical Context of Pixar's Restructure

This restructuring is the largest in Pixar’s history, marking a significant moment for the studio. The changes are designed to position Pixar for future success, focusing on its strengths and addressing past challenges.

Source: Pisces: Inside Out (2015)/ Disney/Pixar/ IMDB

This strategic pivot aims to ensure Pixar continues to produce high-quality, beloved animated films.


To Infinity and Beyond?

As Pixar navigates this period of transformation, the industry and audiences alike are watching closely.

Wall-E looking straight into the camera.

Source: JoBlo Animated Videos/YouTube

The studio’s ability to adapt and innovate will be crucial in maintaining its reputation for excellence. With upcoming releases and a renewed focus, Pixar aims to continue captivating audiences worldwide.