Disney Interactive is cutting 700 jobs, or 26 percent of its work force, as the company tries to make its game and Internet division more profitable.
The cuts are expected to hit Disney’s Playdom social games group the hardest. Disney bought Playdom for $563 million-plus in 2010 when the Facebook gaming craze was at its peak.
Disney also invested heavily in its toy-game hybrid, Disney Infinity, which has been popular but isn’t as big a hit as Activision’s Skylanders franchise, which pioneered the toy-game market.
“Disney Interactive has consolidated several lines of business as part of an effort to focus the division on a streamlined suite of high-quality digital products,” the company said in a statement. “As a result of this restructuring, we have undergone a reduction in workforce. These actions were difficult but necessary given our long-term strategy focused on sustainable profitability and innovation.”
The New York Times first reported the layoffs, and a Disney representative confirmed it.
Disney Interactive also runs Disney.com and makes mobile games, like “Where’s My Water?” and Temple Run: Oz.