Disney is laying off about 160 employees, or 20% of the total staff, from its feature animation unit.
Move comes as the Mouse House has greenlit "American Dog" as its next feature toon to move into production, most likely for a 2008 release.
Cuts aren't connected to the company-wide layoffs the Mouse House went through in summer. Feature animation was excluded at the time, apparently fitting in with CEO Bob Iger's public insistence that toons are a core part of the company's future.
Unlucky employees are expected to be notified in the next couple of weeks.
Layoffs come as production is winding up on "Meet the Robinsons" -- which will be released in March -- and starting on "American Dog." Latter pic, which is being directed by "Lilo and Stich" helmer Chris Sanders, is about a TV star dog who gets stranded in mid-America.
A release date hasn't been set, but since the Mouse House has said it is committed to releasing one pic per year from WDFA, it will likely come out some time in 2008.
Layoffs apparently came as a result of WDFA toppers Ed Catmull and John Lasseter, who took over the division when Disney bought Pixar, concluding they had more employees on hand than needed to make "American Dog."
"After a careful review process, the management team at Walt Disney Animation has determined that each film will dictate its own appropriate production schedule," a Disney rep said. "The result of this necessitated a reduction in staff."
Other pics in development at WDFA for post-2008 release include "Rapunzel," "Joe Jump," and "The Frog Princess."
Cuts won't effect Disney-owned Pixar Animation, which is also on track to release one toon per year going forward. "Ratatouille" comes out in June, and a third "Toy Story" is also in the works.
Last major layoffs at WDFA came in the late '90s, when the unit started shifting away from hand-drawn animation.