Blab Entertainment
Pixar Cuts 116 Jobs as Toy Story 5 Nears $1 B, Raising Questions About Studio Economics
In a surprising turn, Disney announced a third wave of layoffs that will cut 116 employees from Pixar Animation Studios in Emeryville, California, even as its latest feature, Toy Story 5, edges closer to a $1 billion global box‑office milestone.
Released on June 19, 2026, Toy Story 5 has racked up $957.3 million worldwide, making it the third‑highest‑grossing film of 2026 and the third‑most successful Pixar title after Inside Out 2 and Incredibles 2. The film’s strong performance, however, has not insulated the studio from a broader reassessment of its resource allocation.
Disney said the layoffs are part of a “continual evaluation of how we manage resources and reinvest across the company as our industry continues to evolve.” The decision follows a string of under‑performing releases. Hoppers, which premiered on February 23, 2026, earned $389.5 million on a $150 million production budget. Hollywood break‑even estimates, which factor in marketing and distribution costs, place the required revenue at roughly $300–$375 million, meaning the film has not yet reached the threshold for profitability.
Elio, released in June 2025, grossed $154 million worldwide against an estimated budget of $150–$200 million. Its earnings are the lowest for a Pixar feature since Onward, whose run was shortened by the COVID‑19 pandemic.
According to reports from The Wrap, the layoffs will primarily affect production and operations staff. An anonymous insider told Cartoon Brew that the studio had announced earlier in the year that it was shifting to a “long and lean” production schedule. Another source said future Pixar movies would be limited to 16,500 person‑weeks of work, compared with 18,500 to 20,000 on previous films.
Disney’s broader restructuring is reflected in a memo from CEO Josh D’Amaro, who noted that the company had already cut 1,000 marketing‑team positions in April. D’Amaro said the company was looking for ways to “streamline operations and foster a more agile and technologically‑enabled workforce to meet tomorrow’s needs.”
The layoffs and production‑scale reductions occur as Pixar’s slate for the next few years is relatively light. The studio has announced only two releases: Gatto, a 2‑D film that will debut on March 4, 2027, and Incredibles 3, slated for June 2028. A third film, Coco 2, is expected in 2029.
Pixar’s traditional model of alternating high‑budget sequels with original projects is being challenged by rising production costs. Leadership has indicated that it will spend less on new stories, especially those that carry higher financial risk.
Industry observers note that the juxtaposition of billion‑dollar sequels and significant staff reductions highlights the tension between creative ambition and corporate economics. Pixar remains a leader in animation technology, but the studio is reassessing how it balances risk, cost, and innovation.
The current situation leaves several questions unresolved. It is unclear how the reduced workforce will affect the development of upcoming titles, whether the studio will adjust its budgeting practices, and how the changes will influence Pixar’s long‑term creative output. Disney’s broader strategy for its animation division, and whether it will extend similar cuts to other studios, remains to be seen.
As of July 23, 2026, Pixar’s next releases are scheduled for 2027 and 2028, with no confirmed release dates beyond that. The studio’s future projects will likely be influenced by the new production model and the ongoing evaluation of its financial performance.
The layoffs and production‑scale adjustments underscore the challenges faced by even the most successful animation studios in a rapidly changing entertainment landscape.
Released on June 19, 2026, Toy Story 5 has racked up $957.3 million worldwide, making it the third‑highest‑grossing film of 2026 and the third‑most successful Pixar title after Inside Out 2 and Incredibles 2. The film’s strong performance, however, has not insulated the studio from a broader reassessment of its resource allocation.
Disney said the layoffs are part of a “continual evaluation of how we manage resources and reinvest across the company as our industry continues to evolve.” The decision follows a string of under‑performing releases. Hoppers, which premiered on February 23, 2026, earned $389.5 million on a $150 million production budget. Hollywood break‑even estimates, which factor in marketing and distribution costs, place the required revenue at roughly $300–$375 million, meaning the film has not yet reached the threshold for profitability.
Elio, released in June 2025, grossed $154 million worldwide against an estimated budget of $150–$200 million. Its earnings are the lowest for a Pixar feature since Onward, whose run was shortened by the COVID‑19 pandemic.
According to reports from The Wrap, the layoffs will primarily affect production and operations staff. An anonymous insider told Cartoon Brew that the studio had announced earlier in the year that it was shifting to a “long and lean” production schedule. Another source said future Pixar movies would be limited to 16,500 person‑weeks of work, compared with 18,500 to 20,000 on previous films.
Disney’s broader restructuring is reflected in a memo from CEO Josh D’Amaro, who noted that the company had already cut 1,000 marketing‑team positions in April. D’Amaro said the company was looking for ways to “streamline operations and foster a more agile and technologically‑enabled workforce to meet tomorrow’s needs.”
The layoffs and production‑scale reductions occur as Pixar’s slate for the next few years is relatively light. The studio has announced only two releases: Gatto, a 2‑D film that will debut on March 4, 2027, and Incredibles 3, slated for June 2028. A third film, Coco 2, is expected in 2029.
Pixar’s traditional model of alternating high‑budget sequels with original projects is being challenged by rising production costs. Leadership has indicated that it will spend less on new stories, especially those that carry higher financial risk.
Industry observers note that the juxtaposition of billion‑dollar sequels and significant staff reductions highlights the tension between creative ambition and corporate economics. Pixar remains a leader in animation technology, but the studio is reassessing how it balances risk, cost, and innovation.
The current situation leaves several questions unresolved. It is unclear how the reduced workforce will affect the development of upcoming titles, whether the studio will adjust its budgeting practices, and how the changes will influence Pixar’s long‑term creative output. Disney’s broader strategy for its animation division, and whether it will extend similar cuts to other studios, remains to be seen.
As of July 23, 2026, Pixar’s next releases are scheduled for 2027 and 2028, with no confirmed release dates beyond that. The studio’s future projects will likely be influenced by the new production model and the ongoing evaluation of its financial performance.
The layoffs and production‑scale adjustments underscore the challenges faced by even the most successful animation studios in a rapidly changing entertainment landscape.
