Disney is scaling back content, resulting in Pixar laying off 14% of its workforce.

• Approximately 175 employees at Pixar Animation Studio are being let go, which represents about 14% of the workforce.
• Disney CEO Bob Iger's mandate is to prioritize quality content over quantity.
• Disney+ will no longer be the primary focus for Pixar, as the company shifts its attention back to theatrical releases and away from short-form series.

Long-expected layoffs are hitting Pixar Animation Studios today.

Pixar is planning to let go of approximately 175 employees, which represents about 14% of its workforce, according to a spokesperson for its parent company. This decision was made by CEO Bob Iger as he focuses on improving the quality of content rather than quantity.

Last year, other Disney businesses experienced layoffs, but Pixar's cuts were postponed due to production timelines. Initially, it was anticipated that 20% of the animation studio's staff would be let go.

Iger, who resumed his role as CEO in late 2022, has been striving to address the company's declining box office performance, which has been influenced by both the company's content choices and pandemic-related shutdowns. Despite the success of Disney's franchises such as the Marvel Cinematic Universe, the company has struggled to connect with audiences through its animated films.

During the pandemic, Disney+ was strengthened by the company's decision to release theatrical movies directly to digital, despite the strain it put on the creative teams.

Parents were trained to look for new Disney streaming titles instead of theaters, even when Disney decided to bring its films back to theaters. However, audiences started to feel that Disney's content was becoming too existential and focused too much on social issues beyond the understanding of children.

Since 2019, no Disney animated feature from Pixar or Walt Disney Animation has grossed more than $480 million worldwide, in contrast to "Coco," "Incredibles 2," and "Toy Story 4," which generated $796 million, $1.24 billion, and $1.07 billion, respectively, globally prior to the pandemic.

Pixar will refocus on theatrical releases and move away from short-form series for Disney+ with Iger back at the helm.

— CNBC's Julia Boorstin contributed to this report