Disney Interactive has laid off 90 people, or about 20 percent of its workforce, ending its in-house production of video games.
The job cuts at the unit of the Walt Disney do not affect the entertainment giant's effort to launch an online service, dubbed Disney's Daily Blast. Rather, they focus on Disney's retail software business.
The layoffs, made quietly Tuesday, left some former employees bitter. They blamed poor corporate leadership and complained that their Internet access abruptly cut off--a move the company said it took for security reasons. Layoffs at Disney are a rare occurrence.
"It's a very sad experience; it's hard to see employees go," a spokeswoman said.
Disney's foray into cyberspace has been closely watched by industry analysts and consumers, who wonder if the company can successfully make the transition. Many of the video games have been hits, however, such as ones featuring the Lion King, Aladdin, and Toy Story.
Disney Interactive, formed in 1994, now will focus on it s core "edutainment" software for education and entertainment, CD-ROMs for children. It will license or partner for new video games.