Disneytoon animation unit is shutting down

Disneytoon Studios — the mostly direct-to-video animation division of Walt Disney Animation Studios — is shutting its doors.

Walt Disney Co. is closing down the Glendale studio as the company continues to reorganize its animation business in the wake of John Lasseter’s announced departure from the company.

“After much consideration, we have made the decision to end production activity and close Disneytoon Studios,” a Disney spokesperson said in a statement. The closure is expected to result in the loss of an estimated 75 staff positions. Indiewire first reported the planned closure Thursday.

Disneytoon was created in 1988 as Disney Movie Toons and specialized in direct-to-video sequels to popular Disney animated films. The division produced such titles as “The Little Mermaid: Ariel’s Beginning” and “Mulan II,” as well as several titles based on the Tinkerbell character.

Many of these titles were released in home-video format, including DVD and Blu-ray. But the market for these physical formats has shrunk as audiences embrace streaming video.

Some Disneytoon titles had theatrical releases, including 2014’s “Planes: Fire & Rescue.”

The closure of Disneytoon comes as Disney’s vast animation business is undergoing a reorganization. Lasseter will leave the company at year’s end after allegations that he engaged in inappropriate workplace behavior. He was chief creative officer at Pixar and Disney Animation Studios.

Lasseter has been on a leave of absence from Disney since November and is assuming a consulting role until he leaves the company.

Burbank-based Disney has since named two animation filmmakers to take his place. Jennifer Lee, who co-directed the blockbuster “Frozen” for Disney Animation, and Pete Docter, the writer-director behind Pixar’s “Inside Out” and “Up,” will become chief creative officers of their respective studios.

david.ng@latimes.com Twitter: @DavidNgLAT