DreamWorks Animation on Thursday announced plans to cut 500 jobs. That deep cut equals more than 20 percent of its staff. According to the company, it’s PDI/DreamWorks facility in Redwood City will bare the brunt of those layoffs.
The animation studio announced that it would take a $290 million charge in connection with the layoffs. The decision will affect locations all throughout the country, and will target various divisions at the studio. Most of DreamWorks Animation employees are located at its Glendale and Redwood City locations.
The company hopes to fully restructure by the end of 2015 and the move will result in annualized pretax cost savings of approximately $30 million in 2015, growing to roughly $60 million by 2017.
Redwood City’s PDI studio will eventually close, and any remaining employees will be offered the option to move to its Glendale headquarters. PDI was responsible for producing the lucrative animated flick, “How to Train Your Dragon” and its follow-up movie and shorts.
While DreamWorks Animation has produced such massive hits as Kung Fu Panda and Shrek, it now plans to scale back, focusing on one original film, and one sequel per year.
According to DreamWorks Animation CEO Jeffrey Katzenberg, “The No. 1 priority for DreamWorks Animation’s core film business is to deliver consistent creative and financial success. I am confident that this strategic plan will deliver great films, better box office results and growing profitability across our complementary businesses.”
The studio took a $57 million write-down last year after it failed to draw in an audience for “Mr. Peabody & Sherman.” The movie “Turbo” also caused a $13.5 million charge. In 2012 the “Rise of the Guardians” took an $87 million write-down.
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