Walt Disney Co. share price up, cuts 700 jobs at its interactive unit

Walt Disney Co. plans to reduce the number of employees working in its interactive unit by a quarter. About 700 jobs will be cut by the company, which is in pursue of restructuring its online and videogame businesses. The company also shared that it will reduce the headcount at its Internet advertising sales team in order to become more focused on “fewer and bigger partners”.

Last month, Jay Rasulo, Disneys Chief Financial Officer, announced that the sales of Disney Interactive declined by 87 million dollars from 1.06 billion dollars in the year through on September the 28th.

Mr. James Pitaro, who is the current President of Disney Interactive, said in an interview, which was cited by Bloomberg, that “future games for consoles” such as the PlayStation of Sony Corp. and Xbox of Microsoft Corp. “will be licensed”.

The lay-offs have been part of Walt Disney Co.s agenda since February 2014. However, this is not the only step the company plans to take in order to deal with its long-troubled interactive unit. Fewer games for social networks such as Faceboook and less online family and mothers content will be made by the company, which has already started to pull back some of its games production for Xbox and PlayStation.

The company also intends to continue investing in interactive game systems. The videogame “Infinity”, which has proved itself as quite successful will also be invested in, as announced by the President of Disney Interactive. Mr. Pitaro also explained that the unit is working on the new versions of “Infinity”, as well as on the upcoming “Fantasia”.

President Pitaro also said the company is shifting to more extensive sponsorships from display ads. As reported by Bloomberg, he said: “The industry has shifted from social games to mobile games. Our focus is now mobile first.” He, however, refused to make any forecasts about future profitability, saying for the Wall Street Journal: “These are large changes. We are focused not just on getting to profitability, but building a business with sustained profitability and scalability.”

Walt Disney Co. rose by 0.80% on Thursday in New York and settled the session at $83.34, marking a one-year change of +47.87% and market value of $146 billion. According to CNN Money, the 28 analysts offering 12-month price forecasts for Walt Disney Co. have a median target of $80.00, with a high estimate of $92.00 and a low estimate of $68.00. The median estimate represents a -4.01% decrease from the previous close.