Struggling Dreamworks to cut employees — and movies

23 Jan 2015 | Author: | No comments yet »

DreamWorks Animation cuts back to two films a year, delays ‘How to Train Your Dragon 3’.

The 10-year-old studio, which had been turning out three animated films a year, will reduce its slate to two, DWA CEO Jeffrey Katzenberg said Thursday during a hastily scheduled conference call.Dreamworks Animation has said they would cut 500 jobs in all divisions and reduce their release into two movies per year, which consists of one new movie and a sequel.

The sequels to which DWA remains committed are “Kung Fu Panda 3” (March 2016), “The Croods 2” (December 2017) and “How to Train Your Dragon 3” (June 2018). “It’s back to basics,” Katzenberg, 64, said of a studio that produced an impressive 17 consecutive hits after launching in 1997 — until about 2012. “Three films in each and every year is just too ambitious,” Katzenberg conceded during the conference call. “We have fallen short on the creative side.” Among the casualties is DWA’s Redwood City facility, overlooking the San Francisco Bay, which was home to more than 700 employees a couple of years ago. Restructuring at DreamWorks Animation will focus the studio’s production on six films in the next three years, which will include one film and one sequel per year. It will also require cash outlays of $110 million for severance and relocation expenses before generating pre-tax cost savings projected to grow to $60 million a year by 2017. The restructuring comes after months of turmoil in which the studio became the target of an SEC investigation, took several write-offs of films that failed to deliver on expectations and engaged in so many merger discussions that they struck Hollywood insiders as a sign of desperation.

In a statement on Thursday, DreamWorks said the changes are an effort to maximize the company’s “creative talent and resources, reduce costs, and drive profitability.” “The number one priority for DreamWorks Animation’s core film business is to deliver consistent creative and financial success,” said DreamWorks Animation Chief Executive Officer Jeffrey Katzenberg. “I am confident that this strategic plan will deliver great films, better box office results, and growing profitability across our complementary businesses.” Several Bollywood glitterati graced the special screening of Neeraj Pandey’s upcoming venture Baby starring Akshay Kumar, Anupam Kher and Kay Kay Menon in pivotal roles.

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