|Disney's Interactive-Media Unit to Lay Off Several Hundred People|
Walt Disney's interactive-media unit is preparing to lay off several hundred people despite a strong launch for its videogame "Infinity," according to people close to the company.
The cuts at Disney Interactive, which has undergone multiple rounds of layoffs in recent years as it struggled to reach profitability, are expected to begin after the media giant releases its quarterly financial results Wednesday, these people said.
The planned layoffs follow a recent internal announcement by Disney Interactive President Jimmy Pitaro that he would reorganize the group and shuffle several members of his senior executive team.
Mr. Pitaro took sole control of Disney Interactive in November after his former co-president, John Pleasants, was pushed out.
Among the operations expected to be hit by the layoffs is the struggling Playdom social-gaming business, which Mr. Pleasants led before Disney acquired the company in 2010 for $563 million. In an interview as he was exiting, Mr. Pleasants said Playdom was "still challenged" and that he "could have been maybe a little more aggressive" in streamlining its operations.
Disney Interactive has about 3,000 employees.
Disney is expected to continue investing in "Infinity," a combination videogame and toy line that launched in August and has sold more than three million copies world-wide. Disney spent more than $100 million developing and launching "Infinity," which was considered critical for its continuing videogame efforts after a number of failures.
New versions of "Infinity" featuring characters from Disney's Marvel superhero unit and the Star Wars universe it acquired along with Lucasfilm in 2012 are being developed, one of these people said.
During the quarter ended Sept. 28, the launch of "Infinity" helped Disney Interactive to generate $16 million operating income on $396 million of revenue, only the second profitable quarter in its five-year history.
However, the unit still seeks its first profitable fiscal year. Disney Chief Executive and Chairman Robert Iger had set that as a goal for the fiscal year ended Sept. 28. But the company pushed back the target date when the release of "Infinity" was delayed to August from June.
Disney Interactive also operates websites including Disney.com and produces mobile games and content.