Disney Warns Employees of More Layoffs as AI and Automation Reshape the Company

The debate over artificial intelligence and jobs inside Disney is entering a new phase.

Disney’s Chief Legal and Global Affairs Officer Horacio Gutierrez has warned employees that his department will become a “much smaller organization” as the company moves toward automating certain workflows with new technologies. The warning comes months after major layoffs affected Marvel Studios and other Disney divisions, intensifying concerns that artificial intelligence and automation are becoming part of the company’s long-term workforce strategy.

The latest development is particularly significant because Disney has not presented the restructuring simply as an AI replacement program.

Instead, the company is describing a broader transformation involving automation, technology, cost control and changes in how work is organized.

That distinction matters.

Marvel became the symbol of the debate

Disney eliminated around 1,000 positions across the company, with Marvel Studios among the divisions affected.

The layoffs reached employees involved in film and television production, comics, franchise operations, finance and legal functions. Disney disputed reports that Marvel’s workforce had been reduced by 8%, saying the number was considerably smaller. TheWrap reported that the Marvel reductions were connected in part to a smaller film and television production slate and operational efficiencies.

Among those affected were highly experienced creative professionals.

For Marvel artists, the situation became particularly controversial after former Marvel visual-development director Andy Park was among those laid off after 16 years with the studio.

Marvel actor Evangeline Lilly publicly criticized the layoffs and argued that artists were being discarded while AI systems could potentially reproduce or build upon the visual work they had created. Her comments represented her personal interpretation of the restructuring, not an official Disney statement that those specific employees were being replaced by AI.

That distinction is important.

There is evidence of Disney expanding its use of AI and automation, but that does not establish that every individual job eliminated at Marvel has been directly replaced by an AI system.

Disney is nevertheless investing heavily in AI

At the same time, Disney is clearly increasing its technological capabilities.

Last week, the company appointed Karandeep Anand as its first Chief Technology Officer in a newly created role. Anand previously served as CEO of Character.AI and held technology leadership positions at Meta and Microsoft.

Disney said Anand would help advance the company’s technology strategy, with AI explicitly identified as part of his expertise.

The appointment is significant because it places an executive with deep AI and consumer-technology experience directly into Disney’s senior leadership structure.

Disney has also been hiring for AI-related roles across its entertainment operations.

Current Disney job listings include positions related to data science, AI and technology, while Marvel continues to advertise production-related positions. Industrial Light & Magic has also been recruiting technical personnel connected to emerging technologies including AI and machine learning.

In other words, the company is not simply removing technology-related jobs.

It is changing the composition of its workforce.

Hollywood is building AI teams while cutting traditional roles

That may ultimately be the more important story.

A Los Angeles Times investigation found that roughly 30 of around 250 public job listings at major film studios appeared to be connected to AI. Disney, Netflix and Amazon were recruiting people to develop or implement AI workflows for visual effects, animation, sound and dubbing.

Disney was also looking for researchers working on computer graphics and AI, as well as personnel exploring AI and machine-learning technologies for Industrial Light & Magic.

This creates an unusual employment pattern.

A studio can simultaneously:

cut traditional creative positions while hiring AI specialists.

From the company’s perspective, those developments can be part of the same transformation.

The goal is not necessarily to eliminate every human involved in production. Instead, studios can use AI to reduce the amount of human labor required for particular tasks, while hiring a smaller number of employees with specialized technical skills.

The credits could become shorter

The visual-effects industry is especially exposed to this transformation.

A major Hollywood production can employ hundreds of artists across modeling, compositing, animation, lighting, environment design and other disciplines.

AI tools are increasingly capable of assisting with some of those tasks.

TheWrap has previously reported concerns among VFX professionals that automation could reduce the number of workers required for individual productions. On Deadpool & Wolverine, for example, hundreds of artists were involved across multiple visual-effects companies.

The technological question is therefore not simply whether AI can generate an image.

It is whether AI can reduce the number of people required to produce a finished movie.

That is a much bigger economic question.

Disney’s legal department shows the same pattern

The latest warning from Disney’s legal chief demonstrates that the transformation is not limited to Hollywood’s creative workforce.

Gutierrez’s September 18 memo reportedly warned employees that the Legal and Global Affairs organization would become substantially smaller and that some employees would be personally affected.

The memo referred to automating workflows using new technologies. It did not explicitly say that AI would replace the employees being dismissed.

That distinction is becoming increasingly common across corporate America.

Companies often describe AI-related restructuring in terms such as “automation,” “efficiency,” “productivity” or “organizational redesign.”

The technology can still have a direct effect on the number of people needed to perform certain tasks.

The bigger AI jobs story

Disney is therefore becoming an important case study in a much broader transformation.

The first stage of workplace AI was largely about assistance.

AI helped employees write emails, summarize documents, create images and analyze data.

The second stage is more consequential.

Companies are beginning to ask whether entire workflows can be redesigned around AI.

If one employee supported by AI can perform the work previously handled by several employees, companies have an economic incentive to reorganize.

That does not necessarily mean the displaced workers are permanently replaced by machines.

New jobs can emerge.

But those jobs may require very different skills.

The workforce is being redesigned, not simply deleted

Gartner recently predicted that by 2029, around 30% of employees who lose jobs because of AI replacement will eventually need to be rehired, often at higher cost. The research firm argues that companies risk cutting too deeply if they treat AI primarily as a cost-reduction tool rather than as a way to redesign and augment work.

That prediction highlights the uncertainty surrounding the current wave of AI restructuring.

Companies may discover that some tasks can be automated but that human expertise remains necessary for quality control, creative judgment, client relationships and complex decision-making.

Disney’s transformation therefore does not yet prove that Hollywood is moving toward a completely AI-generated workforce.

But it does show something important.

The definition of a creative job is changing.

And for the artists, designers, editors, lawyers and other professionals whose tasks can increasingly be automated, that transformation is already happening.