Disney Studios set to cut up to 5% of workforce

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Walt Disney Studios is ready to eliminate as many as 250 jobs from its staff of about 5,000 people worldwide as early as next week, unnamed “people familiar with the matter” told the Los Angeles Times.

The move would reduce Disney’s workforce by up to 5%.

Most of the cuts will take place in Burbank, California, said the sources. They asked not to be identified because they aren’t authorized to discuss the situation at the Mouse House.

The reductions are thought to most hurt the studio’s distribution operation. Changes in the industry include flat theater attendance, low DVD sales, and worries that 3-D — one of the biggest benefits for multiplexes — may not become any more popular.

Also not helping the studios are such new forms of digital distribution as Amazon.com’s video streaming service and Apple Inc.’s iTunes download store.

For the quarter ending April 2, Disney announced a 14% drop in home entertainment revenue.

“When you see these kinds of trends, frankly, you don’t need as many people in the companies,” said longtime media analyst Harold Vogel said.

Major family movies are coming steadily to Disney from its Pixar Animation Studios unit, which it purchased in 2006 for $7.4 billion.

Nowadays, Disney is also relying more on films from Steven Spielberg’s DreamWorks Studios, which pays Disney a fee for releasing its films, and Marvel Entertainment, which it purchased in 2009 for $4 billion.

Other studios have cut back staff in view of more difficult business operations.

Last year, Sony Pictures cited changing consumption patterns when it laid off 450 people. Santa Monica, California-based indie studio Lionsgate laid off 17 people in its home entertainment division more recently, although it hired several in its digital division. Paramount Pictures is expected to trim costs in its home entertainment division as well.

[Via Los Angeles Times — www.latimes.com/business/la-fi-ct-disney-cuts-20110607,0,7590660.story]

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