MUMBAI: Walt Disney Studios has decided to retrench 5 per cent of its employees even as its revenue from the home entertainment business has dipped.

DVD was one of the major revenue drivers for Hollywood, so much so that even if the movie didn‘t do well in theatres home entertainment business made up for the losses. Ever since the downfall of DVD sales, studios are becoming cautious about spending and are trimming their overheads. The reason for the decline is the emergence of other digital alternatives like Netflix and Amazon.com which are more convenient and less expensive. 

The DVD slump has forced Hollywood studios to re-evaluate budgets. Although majority of the layoffs are a result of Disney combining its global and domestic distribution operations, a few cuts have also come from marketing and production.

It is not just Disney that has been affected by the home entertainment business; other studios like Paramount are soon going to follow Disney‘s lead.

The increase in the number of films made by DreamWorks, Marvel and Pixar and Disney‘s dependence on these studios have also led to Disney‘s decision to shed off 250 people. Disney‘s decrease in original production means fewer employees are needed.