NEW YORK (CNN/Money) - Entertainment and media conglomerate Walt Disney Co. will soon close an animation studio in Orlando, Florida, possibly leaving some 258 animators out of work.

A company spokeswoman said some of the artists will be offered employment at Disney's feature animation studios in Burbank, California, but declined to give a specific number as details are still being worked out.

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"This difficult decision was based on what is best strategically for our business in both the short and long term," David Stainton, president of Walt Disney Feature Animation, said in a statement. "Having the entire animation group working together in Burbank under one roof will further enhance our filmmaking process."

Payrolls for the Feature Animation unit have progressively shrunk over the last five years. In 1999, the unit had 2,200 employees but that number has dwindled following several layoffs and the closure of its Paris office in 2003. The animation department currently has 600 employees in its Burbank studio.

Disney (DIS: Research, Estimates) was a pioneer in hand-drawn animation, producing classic movies such as "Snow White and the Seven Dwarfs," "Cinderella," and "Fantasia." The Florida studio produced the company's latest hand-drawn movies including "Lilo & Stitch" and "Brother Bear."

Computer-generated animation has become increasingly popular in recent years, as evidenced by movies like 2003's "Finding Nemo,'' made by Pixar Animation Studios (PIXR: Research, Estimates).

The underwater adventure was the top-grossing theatrical release in the United States last year, generating about $340 million and racking up 17 million in DVD and videotape sales during its first week in retail stores.

Disney currently has two computer-animated films in production at its Burbank Studio. Children's story "Chicken Little" is due in theaters next year, but its "A Day with Wilbur Robinson," based on William Joyce's book about a boy-genius, is awaiting a release date.

The company, however, reiterated its commitment to traditional animation and said it has some hand-drawn projects in development.  

--from staff and wire reports