BREAKING: DreamWorks just announced that it will be shutting down one of its main studios: PDI DreamWorks, which is located in Redwood City, California. This shut down will begin immediately.
It was also announced that around 500 jobs, nearly half of its staff at that campus, will be eliminated, which is a considerably larger employee cut than originally reported a couple of days ago. The remaining employees will be moved to DreamWorks’ Glendale campus. As part of the re-organiation, Dawn Taubin, Marketing head for DreamWorks Animation, and Mark Zoradi, Chief Operating Officer, are departing. Additionally, Lew Coleman, vice chairman, is retiring.
The studio will also be cutting back the number of films that it produces annually, and will create only one original and one sequel per year. Before this, the studio was attempting to release three films per year, with 2014 being the first year to achieve that goal. However, many of films didn’t perform as the studio hoped as DreamWorks took a $57 million writedown on Mr. Peabody & Sherman. Previous films such as Rise of the Guardians and Turbo were commercial failures as well, costing the studio $87 million and $13.5 million, respectively.
Jeffrey Katzenberg admitted that the goal to make three animated films a year was “too ambitious”, saying:
“Much of my time has been focused on expanding the company. It’s now time for me to turn my attention back to the core businesses and support Mireille [Soria] and Bonnie [Arnold]. Much more of my time will be in support to them and less on the road. I remain 100% committed to building DreamWorks Animation. My time and my focus needs to be on making blockbuster hit films. We have the people to do it.”
DreamWorks said it expects to incur a pre-tax loss of around $290 million in connection with the restructuring. This restructuring is expected to be mostly complete by the end of 2015. The cost cutting is expected to save the company $30 million in 2015 and $60 million in 2017.
The studio will also outsource many jobs to help save money, including production for films such as Captain Underpants, which is to be released in 2017. Mumbai Musical and B.O.O.: Bureau of Otherworldly Operations have been put back into development. The current line-up for the studio is as follows:
- Kung Fu Panda 3 (March 18, 2016)
- Trolls (November 4, 2016)
- Boss Baby (January 13, 2017)
- The Croods 2 (December 22, 2017)
- The Larrikins (February 16, 2018)
- How to Train Your Dragon 3 (June 29, 2018).
Also, it seems Wall Street liked the news of the DreamWorks re-organization as after-hours trading on Thursday resulted in the company’s stock rising by more than 3%.
What do you think of this news? What do you think the future of DreamWorks looks like?
Edited by: Morgan Stradling