Disney's Pixar Studio announced that it may conduct another round of layoffs this year, this time as high 20% of the workforce could be affected, according to TechCrunch.

The animation studio is poised to downsize the workforce from 1,3000 to 1,000 in the coming months as Pixar tones down its content release.

According to insider reports received by TechCrunch, affected staff will include Disney employees hired for its Disney+ division. Reports suggest that the initiative did not reach the target profit.

Pixar assured that the incoming layoffs will not affect production schedules and theatrical release.

The animation studio is set to release the sequel to the 2015 feature film "Inside Out" on June 14.

Animation Industry Suffers Another Layoff with Pixar

This is now Pixar's second layoff within 12 months following 75 employees were dismissed as part of Disney's company restructure back in June that laid off 7,000 staff in total.

The studio has been reported to be underperforming at the box office over the past years after poor sales in "Lightyear" and "Onward."

"Elemental" regained some of the losses in the past theater runs but might not be enough to satisfy Disney's $7.5 billion revenue target for Q4 2023.

Disney has yet to comment regarding the planned layoffs.

Earlier in October, DreamWorks and Netflix Animation teams also took a hit after a round of layoffs reduced the workforce due to project cutbacks.

Also Read: Pixar Conducts Layoffs Affecting 'Lightyear' Director and Producer

Animation Studios Start Leaning Towards AI Use

Coincidentally, several animation studios have announced plans to integrate AI generative tools into the workforce at the same time as the threat of layoffs surrounds the industry.

DreamWorks, in particular, received backlash after co-founder Jeffrey Katzenberg encouraged the use of AI to reduce animation work by 90%.

However, it also would mean that fewer animators would be required in favor of the developing AI tools.

Disney, on the other hand, has been accused of using AI tools for its Thanksgiving promotional poster.

The AMPTP, the animation labor group equivalent to the SAG-AFTRA and WGA unions, has warned that it may launch its own protest this year following the job cuts, overwork, and threat of AI in the industry.

Related Article: Disney's Second Round of Layoffs Has Already Affected Thousands of Employees