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Disney has so many live-action remakes on the boards that it's likely many have even forgotten that Pinocchio is set to be one of them, and while that film wasn't expected to see the light of day for a while, it just hit an unexpected snag. The film had a director in American Beauty and recent James Bond director Sam Mendes, but it now appears that Mendes has left the project.
It was several months ago when Sam Mendes was first attached to the Pinocchio project. At that point, it was said Mendes was in talks. There was never any official announcement that the Skyfall director had officially signed on, so the news from The Tracking Board could simply mean that Mendes and Disney were not able to reach an agreement and that talks eventually broke down. It's also possible that Mendes was planning on directing the film, but something has come up in the last few months that changed things. Pinocchio doesn't have an official release date, so it could very well be that scheduling is fluid right now and that another project has come along that has the director's interest.
It's unlikely that the loss of Sam Mendes is a major blow to Pinocchio since the film was likely in an early stage to begin with. Disney hasn't had much trouble finding directors for these projects in the past. Jon Favreau is currently working on his second Disney remake and Tim Burton and Guy Ritchie have movies in the wings.
At this point, Pinocchio seems to be part of a second tier on Disney's live-action remake schedule. There are movies like Aladdin, Christopher Robin, Dumbo and The Lion King which have set release dates over the next couple years and are in active production right now. Then there are movies like Pinocchio, The Little Mermaid, and Mulan which have seen steps taken toward production, but don't appear to have a great deal going on at this point. Then there's a third tier consisting of movies that were announced, but that we haven't heard of since.
With Disney's fairy tale remakes planned out for the next couple of years, there's certainly time to find a new director. How quickly they find one may go a long way in telling us how quickly Disney wants to get this particular project on the big screen.