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Relativity Furloughs Employees Over Holiday Break (EXCLUSIVE)

Ryan Kavanaugh Relativity
Michael Buckner/Variety/REX/Shutterstock

Eight months after it exited bankruptcy promising a shiny new incarnation, Relativity Media is not making spirits bright: The entertainment company told all of its roughly 30 employees on Monday that they would not be paid over the company’s traditional two-week holiday break.

Workers at the Beverly Hills-based film company were informed that they would be furloughed during Christmas and New Year’s weeks — a period they have gotten off for many years, but traditionally with pay.

“Usually this is the time of year when there is paid leave time for two weeks,” said one person familiar with the company. “But now everybody is out of the office, operations are completely shut down, and they are going without pay.”

The Relativity workers were told to return to the Beverly Hills headquarters on Jan. 3, according to three individuals with knowledge of the situation. But one worker told a friend he is “extremely skeptical” about whether the company can continue to make its full payroll. Other staffers are concerned that the furlough is simply a prelude to more layoffs.

Variety reported last week that Relativity had laid off about half a dozen lower-level and administrative staffers, a personnel reduction that the company declined to comment on.

Ryan Kavanaugh’s company officially emerged from Chapter 11 bankruptcy protection in April, promising to recharge its film operation. But its initial offerings, like “Masterminds” and “The Disappointments Room,” failed at the box office.

The company has claimed it’s ready to make more films after taking on new partners, including a tech company based in Singapore and a Los Angeles-based production house. But Kavanaugh’s company has touted new investment before, only to have the deals fizzle. And the recent announcements — about an investment from YuuZoo, a social media company based in Singapore, and a $200 million partnership with Hollywood-based Storyoscopic Films — have not yet created any noticeable change in Relativity’s operations.

Relativity is also at loggerheads with its partner, EuropaCorp, in a distribution and marketing joint venture. Last week, EuropaCorp’s board met to discuss whether or not they could exit or take over the joint venture.

“It’s all B.S. It’s all B.S.,” one person close to the company said of the promises of more stable finances. “People are worried. They are looking for new jobs. When I see what they are doing to people, I am concerned for my colleagues and my friends.”

A spokesman for Relativity did not immediately respond to a request for comment.