Disney wields massive axe over jobs and films

Walt Disney will reduce its workforce substantially and slash its annual output of films from 18 to eight in cuts greater than Hollywood had anticipated, it was reported today.

Hollywood trade paper Daily Variety also said all the movies would be Disney-branded, suggesting diminished roles for its Touchstone label. It said the Disney announcement was expected within 10 days.

Burbank-based Disney, basking in the glow of a record €108m debut weekend box office for Pirates Of The Caribbean: Dead Man’s Chest, would not discuss the report.

“We are constantly evaluating our business to make it better and more efficient,” Disney spokeswoman Heidi Trotta said in a prepared statement.

Disney’s move reflects a trend in Hollywood to cut costs amid increasing overhead, production budgets and marketing bills.

It has said for some time that it was going to cut its total number of films and concentrate on Disney-branded offerings, which made more money that those released by the studio’s Touchstone label.

The studio has already greatly reduced the number of films released under its Miramax banner.

Disney chief executive Robert Iger said previously that a shift in movie production was coming.

“It becomes a much better investment for us when we make a Disney-branded film,” Iger said last September. “We’re not going to go out of the non-Disney-branded live-action business, but there has been a dramatic shift.”

Wall Street sees the move as necessary if the entertainment giant wants to see double-digit growth, says analyst David Miller, managing director of the brokerage firm Sanders Morris Harris Group.

“Most of the street was on to the fact that Disney-branded film returns were greater,” he said.

Besides its success with Pirates, Disney’s fortunes have been lifted recently by its Pixar-animated movie Cars, which has earned more than €163m this summer.

But the studio has also endured disappointments, including Stick It, Annapolis and The Wild.

Disney’s annual motion-picture capital allocation was believed to be €361m, Miller said.

Spreading that amount over eight films instead of 18 could be better in a variety of ways, including cutting marketing and production costs, he added.