DreamWorks Animation has begun a fresh round of staff layoffs, according to reports in Los Angeles Times, which have been confirmed by other outlets. While the final number is not yet known, sources fear it may exceed the 350 workers laid off in 2013.
With the exception of How to Train Your Dragon 2, which grossed $618m worldwide since release in June and was nominated for an Oscar for best animation, recent films by the California-based studio have failed to meet expectations.
The top-performing films of the past three years were spin-offs or sequels to previous films (Madgascar, Shrek and Kung Fu Panda), with new works Turbo, Rise of the Guardians and Mr Peabody and Sherman underperforming and leading to nearly $160m of writedowns (a reduction in the company’s book value).
The company’s most recent film Penguins of Madagascar, released in November, made $287m at the box office over the past two months – down on the previous film in the series Madagascar 3: Europe’s Most Wanted, which posted $747m.
And not one film of the last decade has topped the company’s best-performing film, Shrek 2 ($920m), with the 2007 instalment of the film franchise Shrek the Third ($799m) and 2010’s Shrek Forever After ($753m) coming in at second and third position.
Recent attempts by DreamWorks CEO Jeffrey Katzenberg to sell the company to Japanese telecommunications giant Softbank and American toy company Hasbro failed, and stock prices are down nearly 50% compared to five years ago. The company also posted losses for the first two quarters of 2014.
An editorial by senior editor Marc Graser in Variety wrote at the time of the failed sale attempts, “with each miss, the executive appears to look more desperate” and implied that the company co-founder’s style of micro-management had impacted the deals.
Nonetheless Katzenberg’s tone was upbeat while addressing audiences in a 2014 London Film festival keynote, “two out of the last four films have lost money but they didn’t put the company at risk,” said Katzenberg in October. “The company is strong and profitable. It will be around for a long time.”
Founded in 1994, the animation studio was formerly a joint venture by DreamWorks and Pacific Data Images, but has been a separate public company since 2004. To date the company’s feature films have earned $12b globally, making it one of the world’s top animation studios, along with Pixar and Disney.
DreamWorks employs around 2,000 workers at the studio’s Glendale and Redwood City facilities. The proposed cuts would follow chief creative officer Bill Damaschke stepping down earlier this month, with producers Bonnie Arnold (How to Train Your Dragon series) and Mireille Soria (Madagascar series) promoted as co-presidents of feature animation.
Layoffs are expected to include “animators, story-board artists and other production personnel and support staff”. A spokesman for DreamWorks contacted by the Los Angeles Times said the company “does not comment on rumour and speculation”.
