The Mouse House’s lone lame-duck operation Disney Interactive has made entertainment financial wags’ predictions come true by enacting an estimated 700 layoffs, or 26% of its workforce. As Deadline‘s financial editor notes, DI was the company’s only money-losing division in the fiscal year which ended last September. Along with staff cuts, DI will be halving the number of games it puts out yearly and will reduce the number of concepts it develops in-house in order to make room for outside licenses. It will also shut down websites BabyZone and Spoonful while looking for more online advertising support for Disney.com.
In a company statement, Disney Interactive reps say it “has consolidated several lines of business … [to] focus the division on a streamlined suite of high-quality digital products. As a result of this restructuring, [Disney Interactive has] undergone a reduction in workforce. These actions were difficult but necessary given [DI’s] long-term strategy focused on sustainable profitability and innovation.”