Disney's Salt Lake City, Utah-based subsidiary, Avalanche Software, has been hit with layoffs. The estimated 15-20 layoffs reportedly took place September 1, and were a response to budget issues as the economy continues to hit the video game industry. An estimated 170 employees are still with the company.

"Disney has been on the losing end for a while, supposedly," said a source.

A Disney representative confirmed the layoffs to Gamasutra, saying, "Avalanche Software has completed a restructuring that resulted in the reduction of a small number of positions."

This follows layoffs at Propoganda, Junction Point, and Black Rock, as Disney moves away from traditional retail product, reportedly to pursue social games.

Avalanche Software (not to be confused with Avalanche Studios) has developed Disney tie-in games since it was acquired in 2005. Most recently the studio worked on the game adaptation of Cars 2, which was fairly well-received by critics. A laid-off employee speaking anonymously also claimed the studio was behind Toy Story 3 last year.