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Disney Interactive lays off 700 employees, narrows development plans

A Microsoft Corp. Xbox 360 console is connected to a demonstration of the Walt Disney Co. Infinity video game system during a Disney Interactive event in Los Angeles, California, June 9, 2013.
Patrick T. Fallon | Bloomberg | Getty Images
A Microsoft Corp. Xbox 360 console is connected to a demonstration of the Walt Disney Co. Infinity video game system during a Disney Interactive event in Los Angeles, California, June 9, 2013.

Disney's Interactive unit will lay off 700 workers, about 25 percent of its total, in a signal that efforts to turn around the long-struggling division haven't done enough.

Last month, Interactive reported its second consecutive quarter of profitability after a long string of losses, credited to the success of Disney's console game Disney Infinity. However, in tandem with the layoffs, the company will cease in-house console game development beyond supporting Infinity and publishing the as-yet-unreleased game Fantasia: Music Evolved, developed by Harmonix. New Disney games will instead be licensed out and developed by other studios.

Read the entire story at Re/code.

By Eric Johnson, Re/code.net.

CNBC's parent NBC Universal is an investor in Re/code's parent Revere Digital, and the companies have a content-sharing arrangement.

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