As per media sources,
The Walt Disney Company
) 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.
BEST BUY (BBY): Free Stock Analysis Report
DISNEY WALT (DIS): Free Stock Analysis Report
PENNEY (JC) INC (JCP): Free Stock Analysis
TARGET CORP (TGT): Free Stock Analysis Report
To read this article on Zacks.com click here.
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
J. C. Penney Company, Inc.
Best Buy Co., Inc.
) have announced layoffs recently as a cost-cutting measure.