Disney has the biggest film in the history of cinema on their hands in Pirates of the Caribbean 2, so what are they going to do? Cut back, lay off, and hunker down.

That may not seem to makes a lot of sense, but that’s the direction the Walt Disney Company is headed. Yesterday they announced that they’ll be slashing their annual movie budget by more than half. They’ll reduce their yearly output from 18 films to a meager 8. They’ll be slashing jobs too. Variety says to expect an announcement on just how many some time in the next 10 days. Disney spokesmen indicate that the job cuts will be substantial.

This is particularly bad news for Disney subsidiary brands like Touchstone Pictures, since the rumor is that all future films will now be released only under the Walt Disney brand.

Meanwhile, Pirates of the Caribbean: Dead Man’s Chest is on it’s way to being the biggest earner in box office history. What’s Disney thinking? Well, movies like Cars and Pirates may have been big money earners for Disney, but they’ve been less successful with their less high profile releases. Anyone remember Annapolis? Exactly.

This may actually end up being better for us, the movie consumer. If Disney trims the fat and dumps loser projects like Annapolis, The Wild, or The Shaggy Dog, that will leave them free to focus more on winning projects like Narnia and Dead Man’s Chest. While they’re slashing jobs, how about eliminating a few people from their lousy direct to DVD division? No one’s interested in Aladdin VII: Iago In Space.