Stage 9 Digital, the digital production company set up by Disney ABC Television Group is set to be folded into abc.com after the fledgling subsidiary was hit by funding cuts and job losses.

The move is a blow to Disney's online ambitions and will curtail the number of digital productions that the division produces. Stage 9, which is run by Sex and the City executive producer Barry Jossen, found success with a number of online projects including short form scripted comedy series Squeegees and Voicemail. Both series were launched in the US before being sold to Microsoft's European portal MSN by international distribution arm Disney ABC ESPN Television. It is currently in production with sci-fi series Trenches.

These changes are part of wider cuts at the company, which has cut 400 jobs across the board, and follow the recently announced merger of its network group ABC Entertainment and production arm ABC Studios.