As part of a major reorganization of its gaming division, Disney laid off 700 employees at Disney Interactive. This represents nearly 26 percent of its staff.
The layoffs were expected but according to some reports the number of employees affected was still staggering.
This latest round of layoffs within Disney were the result of a decision to combine Disney’s mobile gaming division and social games, in addition to the decision to scale back development of all game types.
Disney has said they are now going to rely on outside licensing for most games.
Disney Interactive is also planning to close BabyZone.com and Spoonful.com as part of the restructuring. Additionally, Disney Online will be moving toward advertising sponsorship and will focus on promoting Disney merchandise.
Disney Interactive reported $55 million in operating income for the fiscal first quarter. This was due in large part to sales of Disney Infinity, the video game and toy line that debuted in August 2013. More than 3 million copies of Infinity have been sold so far.
In 2013, Disney Interactive lost $87 million, and has lost more than $1 billion total in recent years.
