Disney Interactive laid off roughly 700 employees, about a quarter of its workforce, a representative for the company confirmed to Polygon today.
The layoffs were a result of a company restructure.
"Disney Interactive has consolidated several lines of business as part of an effort to focus the division on a streamlined suite of high quality digital products," a Disney spokesperson said. "As a result of this restructuring, we have undergone a reduction in workforce. These actions were difficult but necessary given our long-term strategy focused on sustainable profitability and innovation."
According to a report in The New York Times, the layoffs hit Playdom hardest, a division focused on free online games like Disney City Girl, Marvel Avengers Alliance and Pirates of the Caribbean: Isles of War. Star Wars Galaxies and Ultima Online veteran Raph Koster left Disney Interactive and Playdom last year. Late last year, former Playdom CEO and Disney Interactive co-chairman John Pleasants stepped down. Disney purchased Playdom in 2010 through a deal reported to be worth $763.2 million.
Disney Interactive president James A. Pitaro told the Times that the company is focusing on mobile and "core" priorities.
"We're not exiting any businesses, and we will pursue licensing partnerships in which we retain a lot of creative input," Pitaro said. "But this is a doubling down on mobile and an effort to focus much more intently on a core set of priorities."
Disney Interactive publishes a mix of internally and externally developed content. The mobile hit Where's My Water? and the studio's new IP from last year, Stack Rabbit, were created by Disney Mobile's Glendale, Calif. studio. Disney Infinity, the action figure/video game hybrid released last year, was developed primarily by Avalanche Software.
In a recent financial statement, Disney revealed that Disney Interactive revenues were up 38 percent in Q1 2014, year-over-year.
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