About 700 staff members at Disney Interactive, the company's video game and digital media division, lost their jobs Thursday as part of a global layoff, including dozens in Palo Alto.
The layoffs followed the company's decision to scale back internal development of games and to combine its mobile and social games businesses, The New York Times reported.
The layoffs represented more than a quarter of the global staff of the Glendale-based Disney Interactive, which published about two dozen games last year, the Times reported, adding that the division will cut its annual game output by as much as half.
In 2010, Disney paid more than $550 million for the Mountain View social online gaming company Playdom, whose employees later moved to Palo Alto as part of Disney Interactive. Many of those workers lost their jobs Thursday.
Former Playdom head John Pleasants resigned as co-president of Disney Interactive in November.
Disney did not immediately respond to a request for comment, but Disney Interactive President James A. Pitaro told the Times, "These are large-scale changes as we focus not just on getting to profitability but sustained profitability and scalability.
"This is a doubling down on mobile and an effort to focus much more intently on a core set of priorities."