Disney to Conduct Layoffs - Analyst Blog

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As per media sources, The Walt Disney Company ( DIS ) is planning to trim roughly 25% of its workforce at its interactive segment, i.e., by around 700 workers. Earlier this year, the company had announced a similar plan as per which it was to conduct several hundred layoffs in its interactive segment, which has nearly 3,000 employees.

The company's interactive segment, which has been consistently delivering disappointing results, mainly comprises its games and online activities. The segment has been losing money since long, though it reported some profits in the last month on account of its Infinity video game, which was launched last year in August.

Also, the interactive segment's co-president, John Pleasants, resigned from his position, passing it on to the current co-president Jimmy Pitaro.

This move of laying off workers, which will reduce the company's focus on social and mobile games using Disney's main characters, will also lead to the discontinuity of several games the company acquired simultaneously, when  it purchased social gaming division-Playdom, in 2010.

Alongside, the company plans to restructure its mobile platform and keep pace with the changing consumer preferences. It is making attempts to strengthen and focus on its mobile platform as it expects positive results from this segment, considering that the industry is rapidly moving on the growth trajectory.

Disney plans to innovate and develop additional games for its Infinity segment, which consists of both video games and the toy line. Moreover, the company intends to license most of its games in order to boost revenues.

Although the cutbacks speak negatively about Disney, the restructuring initiatives are likely to bear fruit and usher in some optimism for the company. This positive news has been pushing the shares of the company up, facilitating it to hit a 52-week high of $83.42 on the last trading day.

Apart from Disney, many other retailers like Target Corp. ( TGT ), J. C. Penney Company, Inc. ( JCP ) and Best Buy Co., Inc. ( BBY ) have announced layoffs recently as a cost-cutting measure.



BEST BUY (BBY): Free Stock Analysis Report

DISNEY WALT (DIS): Free Stock Analysis Report

PENNEY (JC) INC (JCP): Free Stock Analysis Report

TARGET CORP (TGT): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BBY , DIS , JCP , TGT

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