The Walt Disney Company (NYSE:DIS) will eliminate 700 jobs from its interactive unit as part of its ongoing effort in consolidating its online and video games business, according to report from the Wall Street Journal.
The report indicated that the world’s largest entertainment company started the workforce reduction since last month, and the number of job cuts is on the high end of the estimate. The Walt Disney Company (NYSE:DIS) also plans to reduce the number of games it will create for social networks such as Facebook Inc (NASDAQ:FB), and online content for families.
The entertainment giant already cut back its games development for consoles such as the Xbox of Microsoft Corporation (NASDAQ:MSFT) and PlayStation of Sony Corporation (ADR) (NYSE:SNE).
Jimmy Pitaro, president of Disney Interactive said Infinity is excluded from the planned reduction in games development. The video game franchise was successful and sold more than 3 million units since its launching in August. According to Pitaro, Infinity is one of the few areas wherein the company plans to increase its investment.
He added that Disney Interactive is currently working on new versions of Infinity. Some people with close relationship with Disney said the company will feature its Marvel and Star Wars properties in the latest version of the video game franchise.
Furthermore, Pitaro said Disney Interactive will discontinue several games under Playdom, the social video maker it acquired for $563 million in 2010. According to him, the company will focus its future efforts in developing games for mobile devices.
“These are large changes. We are focused not just on getting to profitability, but building a business with sustained profitability and scalability,” said Pitaro.
The Walt Disney Company (NYSE:DIS) will also combine some of its family websites such as Babyzone.com to its main website, Disney.com.
Analyst at Nomura recently raised its price target for the shares of The Walt Disney Company (NYSE:DIS) from $90 to 92 per share on Tuesday. Analysts at Macquarie also increased their price target for the stock to $88.00 from $80 a share. The shares of the entertainment giant closed at $83.34 a share on Thursday.
