US Disney studios latest to see staff cuts

US Disney studios latest to see staff cuts
Michael French

By Michael French

January 29th 2009 at 11:00PM

Propaganda lays off 30; Fall Line and Avalanche to be combined, causing 20 jobs to be lost

Disney's Interactive Studios division is the latest games company - and one of many companies working in software and technology - to see lay-offs amongst its development staff.

A report on Shacknews confirms that Disney's Vancouver studio Propaganda has laid off close to 30 staff.

This comes following, according to a report on Kotaku, the cancellation of a sequel to Turok, which the Disney studio released early last year. The game was the first (and so far only) attempt by the firm to create 'grown up' games (as opposed to its bread and butter family entertainment offerings) for its Touchstone label.

Representatives from Disney didn't confirm the cancellation, but said Propaganda would remain a two-team studio working on two unannounced games.

Elsewhere in the Disney development empire, the company has also chosen to merge its two Utah studios, Fall Line and Avalanche.

According to GameDaily, the combo will cause 20 jobs to be lost. Fall Line was founded in early 2007 to develop games for the Wii.

A leaked memo sent out to staff described the thinking behind the cuts: "As you can imagine, given economic conditions, every industry has been impacted on a global scale. In response to this challenging business environment, we have examined ways in which we might be able to work more efficiently.

"We have taken measures to control costs by freezing most open positions, deferring some capital projects, reducing support from third parties, taking significant reductions in travel and entertainment expenses and eliminating other activities. The elimination of existing positions that we communicated today was a necessary step that we had hoped to avoid.

"In addition to all of these changes, we have also determined that Directors and above will not be receiving merit increases this year. All of these actions are part of a focused effort to ensure we are closely managing the organization through the current economic climate, balancing our need to respond to the current environment with our goal of driving significant long-term growth."