The long-expected layoffs at Pixar Animation Studios have begun.

Immediately, management on the storied firm that traces it origins to the late Steve Jobs and was purchased by Disney in 2006 will notify workers of the reductions, The Hollywood Reporter has realized. It’s the greatest restructuring in Pixar’s historical past, though prime management isn’t impacted.

Roughly 14 p.c of Pixar’s workforce, or round 175 workers, can be let go. Earlier than the reductions, roughly 1,300 individuals labored on the animation studio.

The layoffs are a part of Disney chief Bob Iger’s overarching mandate to return to a deal with high quality, versus churning out content material for streaming which was a precedence for his sort-lived successor, Bob Chapek. Disney execs have talked about returning to a deal with high quality throughout quite a few earnings calls this yr, saying artistic groups throughout the corporate had been stretched too skinny within the arms race to feed streamers.

Pixar workers have identified since January that layoffs had been coming. If there’s some solace available, it’s that reductions are lower than the 20 p.c reported in January by some information retailers. Neither is Pixar being singled out.

There have been layoffs throughout all of Disney final yr however cuts at Pixar had been delayed due to manufacturing schedules, sources say. Pixar — led by Pete Docter — will now not be specializing in direct-to-streaming collection, however on its function movies. That excludes Win or Lose, which is about to debut later this yr.

The once-invincible animation studio suffered a serious setback through the pandemic period when the Chapek regime determined to ship Luca, Soul and Turning Pink straight to Disney+ though cinemas had begun to reopen or had been in full restoration mode. After which its first post-COVID theatrical launch, Lightyear was largely dismissed by critics and audiences, exposing Pixar to ongoing scrutiny.

Pixar acquired excellent news final yr with the discharge of Elemental, which earned practically $500 million globally to turn into the most important authentic animated film since Pixar’s Coco in 2017. It was additionally a streaming sensation.

And theater homeowners have excessive hopes for Inside Out 2, which opens June 14 in North America (the trailer was essentially the most watched animated trailer within the firm’s historical past). Different upcoming movies embody subsequent yr’s Elio and Toy Story 5 in 2026.

The total memo from Pixar president Jim Morris to workers on Tuesday is under:

Whats up everybody. 

I’ve spoken to you a lot instances over the past yr about our pending transfer away from collection manufacturing for Disney+, the return to our deal with function movies, and the discount in our workforce that may accompany that. That day is right here, and whereas it isn’t coming as a shock to anybody, it is without doubt one of the hardest adjustments we’ve needed to make, because it means we can be parting with quite a few proficient and devoted colleagues and associates.

Immediately, leaders will start the method of notifying workers whose positions are being impacted. Calendar invitations to talk with a pacesetter have already gone out to these people, and we anticipate we may have related with everybody impacted by the top of the day. 

I wish to guarantee you that can be offering intensive assist as our colleagues begin to transition out of the studio. We’re dedicated to making sure that their departure is dealt with with the utmost respect and care at each stage. That is necessary to me, and I perceive how necessary that is to all of us within the Pixar neighborhood. I’ll host a quick Studio Assembly by way of Zoom this afternoon at 5:00 to speak extra about immediately’s announcement.

Regardless of the challenges in our trade over the previous few years, you could have all persistently proven as much as contribute, collaborate, innovate, lead, and do nice work at this studio. I offer you my deepest thanks, and for individuals who can be leaving us, I’m hopeful that our paths will cross once more, each professionally and personally.

Jim