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Disney Cuts 250 Jobs in Consumer Products and Digital Unit

Brooks Barnes
Disney slashes 250 consumer products jobs

LOS ANGELES — Disney cut 5 percent of its consumer products and digital media staff on Wednesday, or about 250 jobs, a spokesman said, the latest in a series of belt-tightening moves by the world's largest entertainment conglomerate.

While small in a broad sense — Disney has more than 180,000 employees worldwide — pocket-size layoffs have been frequent at the company in recent months. In May, more than 300 workers lost their jobs when Disney pulled the plug on Infinity, a video game and toy line. In July, 30 people were let go by Maker Studios, a Disney-owned video business. Walt Disney Parks and Resorts has also made cuts, including a downsizing at its Imagineering research and development unit in early August, a move that the company said was tied to the completion of Shanghai Disneyland.

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A portion of the new layoffs have hit video game workers, as Disney continues to shift its game approach to a licensing model and away from internal development, according to Brian Nelson, a Disney spokesman. A group of affected employees worked at a Bellevue, Wash., facility that supported the company's Marvel: Avengers Alliance mobile and social network games. The games were shut down last week after a sequel failed to catch on, a relatively routine occurrence in this fast-changing corner of the industry.

Patrick T. Fallon | Bloomberg | Getty Images

Additional cuts were the result of streamlining at the Glendale, Calif., headquarters of Disney Consumer Products and Interactive Media. Disney combined the two businesses into a single operation last year, in part to save money by eliminating overlapping departments, including marketing and human resources.

After a period of blistering growth fueled by the "Frozen" and "Star Wars" franchises, Disney Consumer Products and Interactive Media has recently emerged as an area of concern for some analysts. A lavishly promoted line of interactive toys called Playmation was a sales disappointment last Christmas. Starting in the spring, the unit reported back-to-back quarterly declines in profitability, even as every other Disney division delivered improvements.

Disney Consumer Products and Interactive Media reported profit in the second quarter of $357 million, an 8 percent decline from the year-earlier period, something the company attributed to fading sales of "Frozen" merchandise and the unfavorable impact of foreign exchange rates. The unit's third-quarter profit totaled $324 million, a 7 percent decline.

Disney's fiscal year ends on Sept. 30.