Can Pixar Cut Its Way To Prosperity?

Pixar Animation, once considered by many as the ne plus ultra of contemporary animated movies, is cutting 14 percent of its staff.

When Elon Musk sent out a memo in April stating that he was mandating a Tesla staff reduction of 10-plus percent, people, even among those who have nothing to do with the company, met the news with surprise and consternatio.

Ten percent! Clearly an outrage. The textbook definition of “decimated.”

But that’s nothing compared with the message sent out in May by Jim Morris, president of Pixar. His staff reductions affect more people, percentage-wise than the Musk move. Morris attributes the move to refocusing on feature films rather than doing things to help gin up the numbers for the Disney+ streaming service.

Pixar, founded in 1986, has been a part of Walt Disney Studios since 2006.

So even though Pixar has its headquarters in the Northern California town Emeryville, which might make it seem as though there is some space between it and the home office. But the word clearly came from Burbank that Pixar needed to produce product to launch on Disney+, including Soul, Luca and Turning Red. The work may have helped Disney+ some, but evidently wasn’t a big help to the Pixar numbers.

And the thing is, Pixar numbers haven’t been all that great of late.

Pixar seemed sprinkled with pixie dust with its first feature, Toy Story, back in 1995. Although its worldwide gross wasn’t all that great by today’s figures, $365,270,951 (per The Numbers), you have to measure that in the context of its budget: $30 million. That is one hell of a return on investment.

As time went on, budgets increased. But while the returns weren’t comparable with the Toy Story number—for example, in 2007 Ratatouille had a budget of $150 million and global box office of $626.5 million—things were still looking good.

In 2010 it released Toy Story 3, which garnered $1.068 billion at the box office on a $200 million budget. It is a little surprising that there was a Cars 3, because Cars 2, released the year after Toy Story 3, also had a $200 million budget, but it made “just” $560 million at the box office, about half of Toy Story 3.

One a studio breaks a billion, it is probably hard not to get to that financial space again.

But it took six years, 2016, to have another billion-dollar movie, Finding Dory, which made $1.025 billion at the box office.

Two years later, Incredibles 2 brought in $1.242 billion globally, and the following year, 2019, Toy Story 4 took in $1.072 billion.

Of course, in 2020 the bottom dropped out of the global film industry.

Pixar released Onward the first week of March, shortly before the lockdowns kicked in.

Onward had a budget of $200 million. It took in $133 million globally.

While most people, even if they haven’t seen them, have a notion of what Toy Story or The Incredibles is about. But Onward? According to Disney.Fandom.com: “Set in a suburban fantasy world, the film follows two elf brothers who set out on a quest to find an artifact that will temporarily bring back their deceased father.” COVID or no COVID, that seems like a dubious plot at best: dead elf father regenerated?

In 2022 Lightyear showed that Toy Story was becoming battered: a $200 million budget and $218.7 million at the box office.

Elemental came out in 2023, again with the $200 million budget and “$484.8 million at the ticket window.

In other words, with few exceptions, the kinds of returns that Pixar garnered in 1995 were becoming increasingly rare.

What’s more, Pixar has had increased competition at the box office since its rise.

For example, there is its sibling company, one of the original animation studios, Walt Disney Animation. In 2013 Frozen took in $1.290 billion; in 2014 Zootopia made $1.023 billion; and in 2019 Frozen II $1.450 billion.

And Illumination animated films have done big box office, as well. In 2015 Minions had $1.159 billion box office and spin-off Despicable Me 3 took in $1.034 billion in 2017.

Last year’s The Super Mario Bros. Movie was second only to Barbie, taking in $1.362 billion at the box office.

So here’s the thing. Waning numbers. Seriously strong competitive studios. What’s a company president to do?

Well, at Pixar it seems the answer is eliminating 14 percent of its people.