Entertainment giant Disney (NYSE:DIS) is laying off a substantial number of employees at Pixar Animation Studios as part of its ongoing restructuring efforts. According to the Hollywood Reporter, around 14% of Pixar’s workforce, or nearly 200 employees, will be affected.
This move is part of Disney’s broader strategy to streamline operations, cut costs, and focus on sustained growth and profitability. Market rumors had already indicated that Disney was planning workforce reductions at Pixar Animation Studios and was in the process of determining the extent of these cuts.
Disney Targets Profitable Growth
Disney is prioritizing a comprehensive business turnaround strategy. During the Q2 conference call on May 7, Disney’s leadership announced that the company is on track to meet or exceed its cost-cutting target of $7.5 billion by the end of FY24. Additionally, Disney reaffirmed its goal of delivering $8 billion in free cash flow and achieving profitability in its combined direct-to-consumer (DTC) streaming business by Q4 FY24.
The company is also engaged in discussions with potential content and marketing partners for ESPN and is focusing on creating a more unified streaming experience. The aim is to boost engagement, reduce churn, and unlock greater advertising opportunities.
According to the TipRanks Stock Analysis tool, “Bulls Say, Bears Say,” analysts bullish on DIS believe that the company’s DTC streaming business is on track for profitability, with expected improvement in average revenue per user and operating margins.
Is Disney a Buy, Sell, or Hold?
Disney stock is up about 14% year-to-date. Wall Street analysts are upbeat about its prospects. It has 20 Buy and five Hold recommendations for a Strong Buy consensus rating. The analysts’ average DIS stock price target of $129.38 implies 25.6% upside potential from current levels.
