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UPDATE, 11:16 AM: “Sizable” layoffs are coming. It’s just a matter of how many, and when. DreamWorks Animation may cut up to 500 employees in the next few months, sources tell Deadline. That’s potentially 23% of its 2200-strong animators, tech, and support staff, axed in the wake of a flop and key release date changes for Mr. Peabody And Sherman (moved off the 2013 calendar and into 2014) and Me & My Shadow (sent back into development). Those calendar shifts created a workload deficit for the studio, which will have to trim production staff as a result. Just last month, DreamWorks Animation made Fortune’s Best Companies To Work For list.
PREVIOUSLY, TUESDAY PM: On Tuesday, distributor Fox delayed DreamWorks Animation’s 3D pic Mr. Peabody and Sherman to spring 2014, reducing the company’s 2013 slate from three wide releases to two. At the same time, Me & My Shadow, an animation planned for 2014 featuring the voices of Kate Hudson, Josh Gad, and Bill Hader, was taken off the schedule altogether and reverted into development. “[We] are adjusting our operating infrastructure costs accordingly,” CEO Jeffrey Katzenberg said in a statement. That “adjustment” will hit an unspecified number of employees across the board as the studio tightens its belt, according to a source with knowledge of the situation. Reps from DWA declined to comment on the job eliminations.
Last holiday season, DreamWorks Animation suffered a blow when Rise Of The Guardians performed below expectations, dropping shares and shaking investor confidence going into 2013. Lazard Capital Markets’ Barton Crockett predicted a $96 million write-down for the studio as a result. The company’s Q4 earnings report is slated for February 26.
Tuesday’s release date tectonics left DWA scrambling to adjust operating costs to match their reduced upcoming lineup. Once Fox pushed Mr. Peabody And Sherman from November 1, 2013, to March 7, 2014, DWA only had two releases to fill out the coming year: The Croods, dated March 22, 2013, and Turbo, set for July 19, 2013. The studio’s updated 2014 schedule now consists of Mr. Peabody And Sherman, How To Train Your Dragon 2 (June 20) and Happy Smekday! (November 26).
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You really think this has to do with Fox moving a date? Jesus, where is Nikki. This has to do with Guardians and Shadow not being right, so that crew is being laid off. How could htis be Fox’s fault or doing?
Taking two gigs off the schedule pretty much means you have to lay off rank and file, who may or may not have done anything for Guardians. But individual artists on a 200 artist show don’t get axed for a show’s performance!
Start with Marketing..
It used to be cool…even enviable.
Now it’s just messy.
Needs a strong creative.
I agree.
Nothing wrong with Guardians… It was no better and no worse than any other C.G movie out there last year
Problem was a non specific title, an early season release date but mostly – the studio didnt know how to sell it.
It was perceived as not being cute enough for families and lacks zeitgeist trending from older kids. In short it just sat there and got punished as a result.
Nope, it starts with a good script; Incredibles was tight, Cars was charming, Toy Story is a hoot. But you can’t just slap together some shtick and force feed it to an audience that can stay home and watch Incredibles over going out to see a Christmas movie that doesn’t even have Christmas in the title. And naming the film after that owl movie was a just dumb.
It would be great if this was true, but a staggering number of well-marketed movies with terrible scripts have done exceptional box office, so it’s pretty hard to believe the script has much of anything to do with it.
If only you know what you were talking about. First off, “Guardians” is named after the book it was based on, the best-selling “Guardians of Childhood.” I suppose you believe Marvel’s upcoming science-fiction film “Guardians of the Galaxy” is also based on “that owl movie.” Yeesh.
Secondly, Guardians was actually a GOOD film, with a clear, coherent story, not always something animated films can say they feature… and, as others have pointed out, garbage often makes money, CoughTransformersCoughCough.
Actually, guardians was a crap cartoon, with weak, unappealing characters, confused direction, and no discernible audience. And it bombed.
somebody woke up on the wrong side of the bed this morning
DWA stock price has been a roller coaster. In 2005 DWA had its IPO at $40 a share it then went down to $20 then up to $30 back to $20 then $30 then $20 in 2009 finally up to a high of $45 in 2010 now it’s between $15 and $20. Jeffrey might soon have to sell DWA to FOX or possibly even to Disney which would be incredibly ironic but logical. He built a great studio but it’s clear they have lost their way. He should cash in and retire he can devote more time to his animation building at USC and be a professor emeritus.
Mr Peabody and Sherman needs to completely be dropped from the schedule and not jut pushed back.
It might be the best movie ever, with the best animation ever, yet nobody is going to go to this movie.
It’s a 2nd tier character that is older than the kids grandparents, that the vast majority of people have noida who they are, nor care.
This from someone a fan of the characters, who has no intention of gong or taking my grand kids to old timer toons.
So what? Kids will discover it or they won’t, the fact that it’s an old property created before today’s kids were born isn’t going to stop people from lining up for Die Hard 5. A franchise is as good or bad as its story, so unless you’ve seen the film, then you should really hold off on judgement. Animation is a different animal… plenty of people thought making a TinTin movie would be a stupid idea, too… after all, it’s some BELGIAN comic, no one in America has ever even read it except comics nerds, and it’s 80 years old, Spielberg is a moron, and blah blah blah. Then it turned around and made $374 million worldwide and will be an eternal moneymaker in Europe where they love the character. Don’t talk nonsense.
The dwarf strikes! Funny how the little man rakes in his multi millions and then kills all the rank-and file guys once reality catches up with his dinosaur of a business. Wonder what Obama thinks of his house midget’s layoffs?
Lord, people on this site are stupid. If you did an ounce of research, you’d know that Katzenberg is the cheapest media company CEO in town. He earns something embarassing like a half-million in salary. He doesn’t NEED to pull “multi millions” out of the company, because he OWNS it. Compare and Contrast to Phillipe Dauman over at Viacom who has swindled shareholders out of almost $500 million in unwarranted salaries and bonuses since he was hired there. Wow, just a stupid remark, one clearly driven by hatred of Barack Obama for some reason.
Dreamworks is a publicly traded company. Katzenberg owns stock. In order for the value of that stock to rise, the company has to vastly increase its earnings. Hence, he’s laying off 500 people the USA while opening a new facility in China. Which part of that is hard for you to understand?
Just to correct some facts – he’s not the highest paid CEO by any means – but two weeks before Guardians came out, he renegotiated his Compensation. Used to be up to 8m in stocks only, now it’s 2.5m cash, up to 4m for bonuses and up to 4m in stocks. Sooo I think he had a pretty good idea where the market was headed…
that is paramount’s fault
That would be Paramount’s fault.
Unfortunately, if you work on less than stellar properties, shuffling like this happens.
Sorry for the folks at Dreamworks and Rhythm & Hues who may be losing their jobs.
You mean that Rise of The Guardians underperformed? But how? Tatting up Santa Claus and arming him with weaponry and other childhood imaginary characters with weaponry didn’t perform well? Who could have possibly seen that coming?
The problem with the DWA lately is simple: Jeffrey feels it is more important to pump out two or three movies a year than to make one or two really great films every 12-18 months. He has been much more interested in quantity than quality and the last three or four movies have suffered accordingly. I hope that HWTYD 2 will be as charming and heartfelt as the first and will — with any luck — change the trajectory of the studio.
Unfortunately Turbo and The Croods look terrible and Sherman & Peabody sounds atrocious. I guess we’ll see, but I worry that these layoffs may just be the start of more to come…
This has nothing to do with Paramount. DWA always did what they wanted. Judging by the extremely uninspired and uncreative materials for The Croods, I think it’s high time JK gets rid of his so-called marketing team in favor of folks with some talent. It’s amazing how they got this far with so many unqualified hacks.
“Unqualified hacks?” I don’t know if you’ve ever toiled in the marketing trenches but it’s not an easy job and marketing folks are always taking hits when the blame game starts. When a pic succeeds it is because its brilliantly produced etc.; when it fails it’s because of lousy marketing. That’s the idiots axiom. Truth is that if a film fails its because the audience rejects it, not because the campaign was bad, although there has been some awful marketing in some cases which have admittedly contributed to failure. But calling ANY marketing group unqualified hacks its going a bit too far.
Perhaps but it wouldn’t be going to far to say that the marketing for The Gaurdians, The Croods and most of Dreamworks product is the same, uninspired, lacking in concept, just show the characters against a neutral backgroud, slap some meaningless pun of a headline that makes you think you know who the character is and call it a day. The marketing department of Dreamworks does not lead, it follows and worse, it follows it’s own tail into a tighter and tighter circle of diminishing returns.
Dealing in absolutes is pretty silly. Sometimes a movie fails because the marketing stunk. Sometimes it fails because the movie stinks and even the best marketing campaign couldn’t have helped it. You sound as silly as he does when you say that when movies fail it’s always because the audience rejects it. There’s never one reason despite the human desire to lay the blame on one culprit. I guess you’re just defending your profession though, which makes sense.
The recovery continues.
Well Said EK.
Man, the people (animators, technicians, etc…) who actually MAKE these 3D movies get the axe?!?! Stop paying the voice talent and non-technical creatives ALL the damned money! Why not hire cheaper voice talent and producers, then maybe those balance sheets would…balance.
This. All day long.
Because when the story sucks, the only way they hope to sell the movie in is by casting “big actor names” for character voicing. Until they fix the storytelling and positioning, this is the only way DWA is getting films greenlit or picked up for distribution.
Didn’t Jeffrey just announce a few months ago that he was opening a fully functioning studio in China? Outsourcing? Firing here and employing there at a fraction of the Union costs? Hmmm….
There is no union for 3d artists.
Actually Qweengoobar, they are covered by IATSE local 839 also known as the Animation Guild. Know the facts before you post.
I’ve been saying for years Katzenberg has to go.i knew his ego was going to bring the company down.
They need to replace bill damashke. He’s the REAL problem.
Who isn’t laying people off? NBC/U and Comcast have and will be laying a bunch of people off, how many people at CNN have and will get the boot? Didn’t HBO fire some people last year?
Very true.
Before you start judging? Have you even watched the film yet? If not, I’m going to say that you are just some biased individual whom like some, judge a film based on its box office. If you DID actually watch it, I can just say you have a seriously bad taste. A “crap cartoon” wouldn’t go ahead to win 9 awards so far, including getting the Satellite awards and best storybiarding and animation effects at the annies, and “weak, unappealing characters”? I can tell you how many people online ship the characters. As for “confused direction, and no discernible audience.”? Not getting where the film is going is probably due to poor inferential skills. It was pretty obvious what the film is talking about. Oh and the film is market to a family audience, specifically the young children to young adults.
Dreamworks. It’s more like Sreamworks. I can’t believe it. Rise Of The Guardians didn’t do so well domestically. I hate franchises and sequels version of Dreamworks theatrical releases. First of all, Pixar is kicking DWA’s buut domestically and yet DWA franchises made 600 million dollars worldwide, Pixar doesn’t that year. I had enough of Pixar number 1 animated film of the years. Where’s my Dreamworks number 1 animated film of the years, Dreamworks. The only Dreamworks number 1 animated film of the years is Shrek 2 and Shrek The Third. Shrek used to be the number 1 2001 animated film, but Monsters Inc’s release in 2012 broke it. Kung Fu Panda made more than 600 million dollars worldwide, Wall-E doesn’t and yet Kung Fu Panda is the second highest grossing 2008 CGI film domestically. What’s wrong with you Dreamworks? Where’s my domestic Dreamworks made more money than domestic Dreamworks that year, Dreamworks? Not only that, if a Dreamworks original is a huge success, it will become a franchise. Wrong, if a Dreamworks original is a huge success, leave it like that. Dreamworks hates innovation and work of art. Dreamworks only like repeat characters version of new theatrical reelases earn 600 million dollars worldwide methods. It looks like Dreamworks has to bring back huge Dreamworks domestic box office grosses as well as Fox so Fox Dreamworks distributions can beat Fox/Blue Sky films domestically. I had enough of worldwide Dreamworks grosses. You can keep the 600 million dollars worldwide, but please bring back domestic Dreamworks is bigger than domestic Pixar tastes. Dreamworks really needs The Croods/Turbo made more money than Monsters University domestically this year. So now is the time to remind American audiences why Dreamworks wants to be the biggest CGI studio out there and shatter the whole “Pixar is great, Dreamworks is bad” mindset. I want audiences to appeal the whole “Dreamworks is great, Pixar is bad mindset”. I want Dreamworks to be the biggest CGI movie studio in the US.
Your cheque from DWA is coming in the post today.
Thank you so much, Rich. It’s too bad Rise Of The Guardians didn’t gross so well. Why won’t Dreamworks brings back Dreamworks made more money than Pixar that year domestically? Kung Fu Panda and Madagascar 3 made more than 200 million dollars domestically and yet they’re not number 1 animated film of the years. Why won’t DreamWorks makes more number 1 animated film of the years? You still need 600 million dollars worldwides to use DreamWorks huge successes. Pixar is kicking DWA’s buut domestically and yet DWA franchises made 600 million dollars worldwide, Pixar doesn’t that year. It’s like DreamWorks more like Screamworks Bring back huge domestic successes, DreamWorks. DreamWorks haven’t do number 1 animated film of the years since that dreaded Shrek The Third. Shrek The Third ruined Shrek and yet Shrek The Third is the number 1 2007 animated film. I wish DreamWorks is huge in the US again. I’m getting tired of Pixar number 1 animated film of the years. The only Dreamworks number 1 animated film of the years is Shrek 2 and Shrek The Third. Shrek 2 beats The Incredibles domestically while Shrek The Third beats Ratatouille domestically. Shrek used to be the number 1 2001 animated film, but Monsters Inc’s theatrical rerelease in 2012 broke it. Kung Fu Panda made more than 600 million dollars worldwide, Wall-E doesn’t and yet Kung Fu Panda is the second highest grossing 2008 CGI film domestically. Where’s my domestic Dreamworks made more money than domestic Pixar that year, Dreamworks? Stop using Pixar number 1 animated film of the years and bring back DreamWorks number 1 animated film of the years. The only way to bring back DreamWorks made more money than Pixar that year domestically is The Croods/Turbo made more money than Monsters University domestically. Disney must gross Monsters University’s domestically box office lower than most Pixar domestic box office because of of Disney’s domestic box office events switch over to Marvel/Lucas Arts. I hope Disney should stop concentrating Pixar’s domesticity box office and I hope Fox DreamWorks distributions can save big DreamWorks domestic box office successes so DreamWorks should bring back DreamWorks number 1 animated film of the years this year at the same time. It’s my opinion. I hope DreamWorks would be a good time to remind American audiences why Dreamworks wants to be the biggest CGI studio out there and shatter the whole “Pixar is great, Dreamworks is bad” mindset and I want audiences to appeal the whole “Dreamworks is great, Pixar is bad mindset” so Dreamworks should to be the biggest CGI movie studio in the US this year.