Pixar Hit Hardest in Disney Layoffs Despite 'Toy Story 5' Success

Disney implemented a significant round of layoffs this week, impacting hundreds of employees across various divisions including ESPN, National Geographic, Disney Entertainment Television, and Disney Studios. Surprisingly, Pixar Animation Studios experienced the most substantial cuts, with a WARN notice filed on July 21 outlining the elimination of 108 positions at its Emeryville headquarters. These layoffs are scheduled to occur in phases, with the majority taking place in September, followed by additional reductions in November, December, and January 2027. The affected roles include editors, technical directors, and software engineers, according to reporting by The Mercury News. Reema Batnagar, Pixar's vice president of people, confirmed the decision in the WARN notice, stating it was a "permanent reduction in the size of the workforce." The notice also specified that affected employees do not have "bumping rights" and are not represented by a union.

Despite the recent box office triumph of "Toy Story 5," which is nearing $1 billion in global sales, these layoffs suggest that the performance of some of Pixar's other recent releases may have contributed to the decision. A source familiar with the situation indicated to The Wrap that the underperformance of the film "Hoppers," which grossed $389.5 million against a $150 million budget, was a contributing factor. Typically, a film needs to earn 2 to 2.5 times its production budget at the box office to break even, accounting for marketing and other expenses. Pixar's preceding animated feature, "Elio," also faced financial challenges, earning $154 million worldwide against an estimated production cost of $150 to $200 million.

This wave of layoffs marks the largest workforce reduction at Pixar since 2024, when approximately 175 employees, representing 14% of its staff, were let go. The company did not respond to a request for comment from Fast Company regarding the recent cuts.