Toy Story 5 might be approaching $1 billion in box office sales, but it seems that's not enough to balance the books at Pixar. A heavy new round of layoffs at Disney includes a reported 116 job cuts at the animation studio behind Toy Story and Inside Out.
Disney says the changes are part of a "continual evaluation of how we manage resources and reinvest across the company as our industry continues to evolve". But what's going wrong if a studio whose latest film has grossed $957 million in month has to make such drastic cuts?
Toy Story 5 has confirmed Pixar’s ability to serve up hit blockbuster sequels. Inside Out 2 from 2024 remains its biggest-selling movie to date, taking some $1.699 billion, followed by Incredibles 2 from 2018. Toy Story 5 could overtake the third and fourth installments of the franchise to enter the top 3, but it seems that's not enough to make up for the performance of the studio's two previous movies.
According to The Wrap, some of the blame is being laid on Hoppers. Despite a positive reception, the March 2026 release has yet to break even. It's earned $389.5 million on a budget of $150 million, but Hollywood break-even estimates are calculated at 2.0 to 2.5 times production budget to account for cinemas' revenue cuts plus marketing and distribution expenses.
Hoppers came on the heels of Elio, which performed badly by any measure. Pixar's only release in 2024 made $154 million against a $200 million budget. That's the studio's worst performance since Onward, whose run was cut short by the Covid-19 pandemic.
Reports suggest the job cuts at Pixar are mainly in production and operations. Their said to reflect what the studio now expects to need for its projected production volume.
An anonymous insider told Cartoon Brew that the company announced to staff earlier in the year that it was shifting to a “long and lean” production schedule. Another person said future Pixar movies would be limited to 16,500 person-weeks of work. That compares a range from to 18,500 to more than 20,000 on previous films.
This seems to be in line with the direction at Disney as a whole. Communicating a previous round of 1,000 layoffs across marketing teams in April, new CEO Josh D’Amaro wrote in a memo that the company had been looking for ways to streamline operations and "foster a more agile and technologically-enabled workforce to meet tomorrow’s needs”.
This paradox of billion-dollar sequels alongside devastating layoffs highlights the tension between artistic ambition and corporate economics. Pixar remains a creative leader in animation, but the studio is having to rethink how it balances risk, cost and innovation.
Pixar's slate currently comprises just two movies for the next two years. There's Gatto, a 2D movie that breaks away from its characteristic 3D animation style, coming on 4 March, 2027, and then Incredibles 3 coming in June 2028. Coco 2 will presumably follow in 2029.
The studio's traditionally alternated dependable sequels with original projects, but rising production costs are challenging that balance. It's decided it needs to spend less money making movies, especially when it comes to taking a risk on new stories like Elio and Hoppers.
I don't think we need to worry that Pixar's future movies will look like Disney's Ozzy Fox, but the job losses are sad and disheartening for the animation sector as a whole, and news of a leaner approach is causing concern among fans. Some are suggesting that Disney should instead rethink its fondness for live-action remakes after the expensive flop of the live-action Moana.
