Layoffs Under Way at DreamWorks Animation

How to train your Dragon

The first layoffs at DreamWorks Animation are starting to take place under the new leadership of Bonnie Arnold and Mireille Soria as co-presidents of the studio’s feature division.

Around 150 to 400 employees are expected to be affected at the company’s Glendale and Redwood City, Calif., outposts, Variety has learned. Bill Damaschke, DWA’s chief creative officer, had already stepped down. Update: DreamWorks Animation announced Jan. 22 that it is cutting 500 Jobs and shutting PDI, with top executives Dawn Taubin and Mark Zoradi leaving the studio.

Those most likely impacted will be animators, storyboard artists and other production personnel, according to sources.

Steve Hulett, business representative for the Animation Guild, told Variety that members began reporting layoffs last week. “We began hearing from members that they were getting laid off, but the company hasn’t responded to our inquiries,” Hulett said.

The Animation Guild operates as Local 839 of the Intl. Alliance of the Theatrical Stage Employees.

DWA has yet to acknowledge the layoffs, saying, “We can’t comment on rumor and speculation.”

Any staff reduction is taking place as the studio rethinks its upcoming release strategy after a string of box office disappointments. Arnold and Soria were tapped co-presidents on Jan. 4. The two are taking a close look at the types of films with which the studio will move forward, reducing production budgets and other overhead at the company.That’s after DWA took an $87 million loss on “Rise of the Guardians,” a $13.5 million hit on “Turbo” and a $57 million writedown on “Mr. Peabody & Sherman.”

“Three of our last four films have not delivered in terms of audience turnout or financial performance,” Katzenberg told analysts in April 2014, before “The Penguins of Madagascar” also underperformed in the latter part of the year, with nearly $271 million worldwide, $78 million coming from domestic theaters.

The company has one film in theaters this year, “Home,” which Fox will release for DWA in March.

Both “Kung Fu Panda 3” and “B.O.O.: Bureau of Otherworldly Operations” were moved out of 2015, with the latter not yet landing on a new release date.

The third “Panda” will now join “Trolls” in 2016, with “Boss Baby,” “Mumbai Musical,” sequels to “Puss in Boots,” “The Croods” and a third “How to Train Your Dragon” also waiting in the wings beyond that.

DWA employs around 2,200.

The last major staff cut came in 2013, when DWA pulled the plug on “Me and My Shadow” and shifted release dates for its films, moving “Mr. Peabody & Sherman” to 2014, resulting in more than 350 pinkslips.

It was only last week that DWA enjoyed a now-brief morale boost when “How to Train Your Dragon 2” was nominated for an Oscar in the best animation picture race, just after winning the Golden Globe in the same category.

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  1. Mr. Bill says:

    The bottom line is that this is no longer a good career to get into. The early allure of digital animation launched thousands of students into the business. Now, I would find it very hard to walk into a class as a teacher and suppress the urge to tell the students to save their money and study something else. It is particularly hard to build a life, a family, a sense of home, when you have to change jobs and usually move every few years. At the very least, make sure you marry somebody with a steady job.

  2. Wish the best to all effected people! However… I’m not sure if DW has the best structure for profitable “art busyness”. Sorry – I do not know situation in detail in making cartoons, but in games industry that I know in some detail a lot of art is outsourced to various contractors (often – abroad) and local artists are working on overall style, making original passes on most important art pieces, working out on production practices and tools/pipelines, supervising technical aspects, delivery quality/schedule etc. A lot of actual art work/animation is done by contractors, that allows to both scale up/down w/o laying off people and just pay overall less money (2+ times less, if outsourcing set up correctly).

    How a cartoon can “underperform” while collecting $271 mil is interesting/strange… I would guess this should give them several times the costs… I heard somewhere that some of the top art directors were paid like $800K/year (in other studios though) – yep, if they waste money in this way – they can loose even with hundreds of millions on sales…

    When I hear some entertainment company laying off a lot of art/production people – it is likely they are only switching to outsourcing/contractor based model. And while it would be nice to employ a lot of “local” people the only way to survive as a company is to make products at lower cost. You can not rely on every single product to be super hit…

    Not a bright future for US artists – but alas I do not see a real alternative. Yep, I would not go to a cinema to watch a cartoon. When it is on Netflix/Amazon/cheap rental – maybe…

    • Ross says:

      “How a cartoon can “underperform” while collecting $271 mil is interesting/strange’ <— only if you don't know how profits are made in the film industry. Movies need to make 2-3 times their production budgets at the box office, just to break even. A lot of these animated toons are costing above 100 million in production costs. Tack on an additional 30-50 million for advertising costs, and you can see that 271 million is considered an underperformer. In addition, international box office numbers are inflated come reporting time to compensate for any held back money by the theater owners.

      • sunshine says:

        “And while it would be nice to employ a lot of “local” people the only way to survive as a company is to make products at lower cost”

        seriously? there are hundred of thousands of worthy individuals who are talented and experienced enough to hit the level of quality and perfection required now for these films, and yet you are suggesting we sell all of our jobs at a lower price to another country? you can all the fancy tools in the world but if you don’t have a person who can master the tool it is useless. technology doesn’t make the film on it’s own…, people who use the tools make the film. this is why there are problems in the industry. it takes teams of people. a company uses their employees like pawns, the same company who over spends on projects and has poor budgeting and management skills. it would be better if the top people making the calls for these things actually had some idea of how their product works in production. the reason people iterate is because the artists, animators, actors, etc are doing their job to the best of their ability. but also there are political battles always going on in the background. always. people make the wrong calls all the time. there is always a bar to hit for your product. the reason so many people work on the product is the company usually over books their work, causing every one to work massive over time hours, they end up having to hire a bunch of help, the people at the top are still making idiotic calls and wasting everyone’s time… it’s a cycle that starts at the top and yet they always fire the artist.

        what game studio did you work at where the art was being outsourced? sounds like an insufficient studio if they can’t do any of their work in house.

      • yes, I know there is a big advertising cost (in games it could be equal to dev budget, on some more), there is cost for theaters (I guess similar to not insignificant obligatory payments to Sony/Microsoft for being able to release a game on their consoles), cost of manufacturing DVDs/etc and so on. But $100 mil is a very big production budget – for a cartoon (?). I do not know how much “typical artist” in cartoons is paid, but game artists are $60K – $100K depending on seniority/etc. With insurance/computers etc – can roughly be over $100K/year on average. So 100 mil is a thousand man years… And it outsourcing is used it can be 2+ thousand man years. This feels like a lot… – at least “from the outside”… And I assume they have most of the rendering farms, additional Maya/whatever tools, the “fur shaders” and so on from previous projects..

        Well – working with movie artists on occasional projects… I know they want to re-do everything dozen times :) and spend months approving some minor color change on characters shirt – maybe this is where some $ goes to… But I hoped more experienced studios (and I assume DW is one of the best?) have all such processes “figured out”…

  3. I bet the folks overseas are going to love those sweet new gigs!

  4. Sal U. Lloyd says:

    LINCOLN was the last Dreamworks movie I will ever see. I boycott because they are politically agendized. Besides, they are usually rehashes.

  5. Curtiss Cott says:

    Observation here: How to Train Your Dragon was a total SMASH. I mean – people LOVED that movie (BOTH). They need to take this cue and RUN with it — producing more than (3). Vikings have impacted world history. They could easily write a number of movies — each covering some aspect of history with the “Dragon twist”. They could make a killing in the toy & online gaming facets too.

  6. WTF Guy says:

    Yeah right Alex, like DWA is the first company to continue lobbying efforts as it adjusted the size of its workforce?. And 34,000 dollars represents about 1/4 of one animators salary. Please give it a rest, you are not so brilliant.

  7. Looks like it’s time to develop a couple of compelling franchises at DWA.

  8. preuser says:

    People don’t want to pay theater prices to watch big budget theatrical cartoons anymore the novelty has worn off with all the CG in Hollywood movies now and modern game console graphics !

  9. Alex says:

    …but this will not prevent the suits at DreamWorks from throwing huge Democrat fund raisers in the future…let those laid off eat cake.

    • Chris says:

      Alex, please waddle back to The Wrap comments board to spew your political brainwashing drivel over there.

      People are being let go because of poor feature development and you blame Obama and his cronies. Get a life.

      • Alex says:

        I’m not blaming Barry, my point (which is brilliant) is that this will not stop the suits at DreamWorks from throwing $34,000 fund raisers for the Dems, while the little people getting sacked will go on unemployment.

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