Massive layoffs at Disney game unit, as 700 people lose their jobs

UPDATE: Disney's video game and Internet division lays off around 26 percent of its global staff; Disney Infinity and developer Avalanche Software unaffected.

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[UPDATE] Following the publication of this story, a Disney representative told GameSpot that today's Disney Interactive layoffs have no effect on Disney Infinity or the development team at Avalanche Software. Disney will continue to invest and grow the Disney Infinity business, the representative said.

The original story is below.

As previously rumored, today Disney announced massive layoffs at its video game and Internet division Disney Interactive. The New York Times reports that around 700 people--or 26 percent of Disney Interactive's global staff--were laid off today as part of a sweeping reorganization.

"These are large-scale changes as we focus not just on getting to profitability but sustained profitability and scalability," Disney Interactive president James A. Pitaro said.

The layoffs came as a result of Disney's move to combine its mobile game business and its social game business. It is not clear if any developers at Disney Infinity creator Avalanche Software were affected by today's cuts. We've reached out for comment.

Disney Infinity has been a bright spot for Disney Interactive, helping the business unit turn a profit for two straight quarters. Disney Infinity has sold more than 3 million Starter Packs to date.

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