DisneyToon Studios Hit by More Layoffs as ‘Fire & Rescue’ Underperforms

More hard times are well ahead for DisneyToon Studios as it gets hit with a wave of recent layoffs.

According to Deadline, 17 full-time employees have been handed the pink slip, with the layoffs beginning as early as last week and continuing well into next month. On August 6^th, a meeting was called in to make this announcement to the staff.

This news may not come as a surprise to those who follow up on the exploits of the primarily direct-to-DVD division, since so far it’s been a really rough going for DisneyToon in general.

Late last year, its direct-to-DVD Tinker Bell franchise was effectively discontinued, putting the brakes on production for a seventh and eighth film. This will effectively make next year’s Legend of the NeverBeast the final film in that line. This can be easily attributed to declining home market sales and surprisingly disappointing merchandise sales as well.

The studio hasn’t fared much better on the big screen either, as Planes: Fire & Rescue continues to underperform in theaters. As of late, it’s only grossed little more than $52 million domestically and a staggeringly low $37 million internationally for a worldwide total of $90 million, nowhere near the $219 million worldwide total of the last film. This doesn’t sound good for the prospects of a third Planes film and was listed as one of the major reasons for the layoffs. Interestingly enough, around the same time of the Tinker Bell franchise’s discontinuation, a Disney staffer told The Animation Guild blog (who first reported on the story) that story work on Planes 3 had started back up, seemingly suggesting that they already had Planes 3 in development well before Fire & Rescue came out. Again, the outlook isn’t very bright with this one.

To make matters even worse, only an estimated 44 full-time employees remain at the company, which means that another major layoff could put DisneyToon’s future in jeopardy. “There is not a lot left to cut here now, the next round of cuts could be closing us down,” one employee told Deadline.

While the future remains uncertain, one thing is for sure: DisneyToon will most definitely have to restructure their output and rethink their current strategy if they want to stay in the business.

What are your thoughts? What can DisneyToon do to put themselves back on the right track?