Pixar announces it will lay off 175 employees

In a new round of layoffs, the company belonging to Walt Disney Animation assures that the cuts are due to the low profits obtained by its films after the COVID-19 pandemic.

Film company Pixar announced Tuesday that it will lay off 175 employees, thus beginning a new round of layoffs that, on this occasion, will affect 14% of the company's total workforce. Company President Jim Morris confirmed the news in a memo to staff obtained by The Hollywood Reporter and indicated that affected people will be notified in the next few hours:

Today, leaders will begin the process of notifying employees whose positions are being impacted. Calendar invites to speak with a leader have already gone out to those individuals, and we anticipate we will have connected with everyone impacted by the end of the day. I want to assure you that will be providing extensive support as our colleagues start to transition out of the studio. We are committed to ensuring that their departure is handled with the utmost respect and care at every stage. This is important to me, and I understand how important this is to all of us in the Pixar community. I will host a brief Studio Meeting via Zoom this afternoon at 5:00 to talk more about today’s announcement.

It is not the first round of layoffs carried out by the animation studio. A year ago, the company laid off 75 workers and, in January, it was announced that the company, as part of the cost reduction plan designed by Bob Iger, would cut its workforce by 20%. The figure has turned out to be slightly lower, although it is still a significant number. Jim Morris was clear that a main reason behind these layoffs was poor box office performance.

Was the distribution model that Pixar adopted after the pandemic at fault for the cuts?

It is no secret that the latest feature films from the company, previously the flagship of animation, have not grossed as much as expected. "Elemental" became the studio's worst theatrical release, grossing only $29.5 million during its first three days in theaters.

But the problem is not simply the content. As Jim Morris assured Variety last summer, the distribution model that the company adopted during the pandemic, where feature films like "Luca," "Soul" and "Red" were released directly on Disney+, did not help improve revenue, but rather got people used to waiting for these films' premieres on the streaming platform:

It’s expensive for a family to go to the movies. It can be a $100 afternoon for a family, and that can be a stretch for some to do. The other thing is that during COVID, we trained audiences to watch our movies on Disney+. I won’t say there was a lot of choice. For periods of time, it was the only thing we could do. We have a little work to unring the bell and motivate families to go to the theater and not wait a few months to see it on Disney+.