BREAKING: Big Layoffs Looming at DreamWorks

Developing story…
Some unfortunate news this morning. An anonymous source at TheLayoff.com wrote about an all-hands meeting at DreamWorks yesterday to announce large-scale layoffs at the studio:

Bill Damaschke called in everyone today February 5th 2013, to announce that DreamWorks will lay off 20-25% of all Company Employees. This includes people from Glendale, India and PDI. Several meetings where arranged to announce the unfortunate news. The term ‘layoffs’ was substituted by ‘transitioning outside the company.’ Most people being let go will be from the show [Me and My Shadow] and Peabody, while people comming out from Turbo will not find many spots available in other productions such as Smekday. Additionally, everyone in production will be called in next week to be announced of his status and re-casting (another term for taking your job away) positions.

Twenty to twenty-five percent of the company’s employees could potentially mean layoffs in the hundreds considering that the studio employs over 2000 people. DreamWorks is currently the largest animation employer in the Los Angeles area; the Animation Guild alone represented over 825 DreamWorks artists as of last month.

The reason that so many people are being let go from Me and My Shadow (as noted in the anonymous comment above) is because the film was removed from the release schedule and pushed back into development, according to this report on Deadline.com. Further, Mr. Peabody and Sherman, which was scheduled for 2013 release, has been pushed back to 2014. The only films that DreamWorks will release this year are The Croods and Turbo. The studio’s release slate in 2014 will consist of Mr. Peabody and Sherman, How to Train Your Dragon 2 and Happy Smekday!

If you’d like to submit news about the layoffs confidentially, you can contact me HERE.

And a note to would-be commenters: This is NOT the place to discuss the content of DreamWorks film. Keep the discussion focused on labor, or risk having your comment deleted.


  • Sky High

    Between this and the news about Rhythm & Hues, this industry is looking pretty dire lately. It used to seem that while most VFX houses were in constant turmoil, artists working contract to contract with long layoff periods in between, places like Pixar and Dreamworks were “safe havens.” Not so much, anymore.

    As a working professional animator myself, my advice to aspiring animators? Don’t do it. Or if you really must work in the business, then as Scar in Lion King said: “Be prepared.”

    • camelsnot

      or work at smaller boutique shops with less overhead, more specialized fields or taking on a variety of work. You may only get a handful of shots here and there, but it also keeps your company viable if you take on other types of work. It’s sad but I think artists need to adapt to outsourcing, subsidies and general d*c-kishness from execs.

      • William

        “It’s sad but I think artists need to adapt to outsourcing…”

        That attitude is what allows such nonsense to proliferate.

        • AmidAmidi

          Define what you mean by nonsense. The reality is that animation is booming worldwide and outsourcing will only increase in the coming years. Wishing something weren’t doesn’t change the fact of what is. The business model for American animation studios will need to evolve to remain competitive in the face of global animation growth.

          • http://www.facebook.com/robin.steele.79 Robin Steele

            Hi, Amid – How would you envision that “evolution,” given that much of the outsourcing is going to places with no labor or environmental rules, and where (by comparison, anyway) conditions are near slave-labor? Even the studios in India are complaining these days, that they can’t compete with the lowballing China is doing. How does the American business model change to compete with that?

          • AmidAmidi

            Robin – If I had the answers, people would be paying me a lot of money right now. ;)

            India may be complaining about China, but remember that Japan had similar complaints about S. Korea in the 1980s. The reality is that within the next couple decades, India and China will both be underbid by new studios in Africa, SEast Asia and perhaps elsewhere.

            The growth we’re seeing in animation is a total paradigm shift. CGI has turned what used to be a highly specialized artform with a limited number of practitioners into a mass-manufactured global art form that can be made by many. Your guess is as good as mine about how the industry will adapt to this over the coming decades.

          • Jason

            If you had certain answers, you’d be silenced instead. Talk of a ‘new reality’ is the same sort of chatter as saying the Postal System is broken while ignoring it’s because of Congress and business hating labor.

          • Skeptical

            Your responses indicate what an illusion the whole “it’s all going overseas” actually is. For 10 years we’ve heard that the Indian animation industry will crush us with equal quality and lower prices. Not only hasn’t it happened, but the Indian animation industry is on the ropes. Why? Because it’s not as easy as it looks, and doing outsource animation is an industry killer, not an industry builder.

            You cite Japan/South Korea as an example. When I got into the industry during the hand drawn days, I heard constantly that “it’s all going to South Korea,” or at least to outsource studios in Canada and Texas and Ohio. Disney worked like crazy to open studios all over the world. Look how that turned out. All those studios are gone, and the South Korean industry has never advanced past do the same TV stuff. Outsource is never as cheap as it’s supposed to be, and outsource studios die the minute they don’t have a steady stream of work. It is a horrible business model from both sides of the equation.

            Here’s Gabe Newell explaining why outsourcing is a sucker’s game: http://kotaku.com/5980762/watch-gabe-newell-talk-for-an-hour-about-making-video-games

            But you don’t need to listen to him. Look at the history of our own field. And it doesn’t help that people who report on the animation industry understand it so poorly that they just parrot the ‘conventional wisdom’ even when that wisdom is so patently incorrect. And outsource to Africa!!!? You gotta be smoking a lot of something to imagine that will happen in our lifetimes.

          • http://twitter.com/spitandspite SpitAndSpite

            I agree it isn’t as speedy (or easy) a transition as some execs would like.

          • AmidAmidi

            Look at the role that Indian VFX crews had on one of the most spectacular pieces of CG animation last year: “The Life of Pi”. They didn’t lead, but they helped make it possible. You seem to believe that it’s a binary choice: America or overseas. It’s not. Skills evolve gradually over time, and artists in those countries take on more responsibilities. The paradox is that when a country becomes good enough to start producing its own original content, they have also become too expensive for outsourcing, hence the move to cheaper countries.

            I don’t even know what to make of your claim that S. Korea hasn’t advanced beyond the “same TV stuff”. It shows a profound and sad ignorance about what’s happening in global animation today.

  • Mathias

    Layoffs affect everyone. Even those who remain at the company. It puts a dark cloud over your office that takes a long time to get rid of. Good luck to everyone at Dreamworks.

  • Tom

    Oof. Worrying news. I think it may have to do with them trying to put out 3 films a year, which put some extra strain on the studio, and I suppose also caused some over-hiring. Purely speculative, though.

  • Chris

    Having many friends working at Dreamworks, that makes me feel really sad. Good luck to all of you! In the meantime, maybe we could analyze and try to understand the reasons why: too many sequels and not enough innovation/creativity in their latest movies (kind of the same recipe over and over again) I am sure they’ll learn and keep moving forward though

    • DE

      That doesn’t really make sense as an argument here since the film they suffered the loss on was Rise of the Guardians. It was not not a sequel and highly innovative with cutting-edge technology and beautiful animation. Meanwhile, Madagascar 3 broke box office records, grossing 750 mil worldwide.

      • Jason

        And Madagascar still had layouts though minor.

  • http://twitter.com/StupixAnimation Jonathan Lyons

    thelayoff.com message board is interesting. People are naming names there.

    • Terry

      Yeah it’s called baseless defamation and libel by angry people.

  • otterhead

    When you’re spending money like that on a film, the pressure is enormous. Guardians did very well in ordinary terms, but it needed to be a massive #1 hit to justify its cost and marketing. You can’t expect every film to make $600 million or more and be disappointed when it doesn’t.

    • Chris

      Guardians did great and still is doing well around the world from what I have seen and it seems dreamworks and William joyce want to make a sequel for this movie, dreamworks still supports guardians and want to continue it and when they do ill be there to see, it will be like another how to train your dragon for them now that they have fox doing the marketing

  • E_Marston

    What is going on with animation? Some of the biggest grossing films out yet they are closing doors and laying off almost daily. Is this the end of the big studio model? I’m interested to see if it starts becoming an industry run by the artists. Bring on the co-op studios!”

    • Rub

      While the thought of an industry run by artists sounds awesome. I still believe you really need people like producers and with managing type jobs. The thought’s lovely, but the big studio model should stay in my opinion.

  • brett

    Seems like the industry is entering a prolonged period of boom and bust. Two months ago they announced they’re going to produce 12 features in 3 years, and now this.

    • http://twitter.com/spitandspite SpitAndSpite

      I think it just depends where you’re at. Canada and India appear to be doing okay, at least from a distance. I mean, know they say they’re spreading the layoff across the board but I’ll be curious to see how many hits India actually takes. Fingers crossed my buds survive the cut :-/

  • Impheatus

    A little more info on what’s going on:http://www.denofgeek.com/movies/me-and-my-shadow/24374/dreamworks-drops-me-and-my-shadow-from-schedule

    This is sad news for both, the awesome animators and us spectators, as Me and My Shadow was the most interesting movie announced by DreamWorks.

  • Joseph Hudak

    The company spends $155 million on Classic Media, and now can’t hold itself together without downsizing? A lot must have really been riding on “Rise of the Guardians”, or some expectation it would reach “Madagascar” numbers.

    The Classic Media purchase, along with the new distribution deal with 20th Century Fox gave the impression the studio was doing very well. Is it possible the new Fox distribution deal has anything to do with this?

    • http://twitter.com/spitandspite SpitAndSpite

      From a business standpoint, you can’t fault them for such a cheap buyout of Classic Media (assuming the rights were all picked up which it appears they were) considering the library it has. That was actually a really great buy.

  • wever

    I love how people use other words for “lay off” as if they themselves are afraid about them! You’re already doing it! Why not just use “lay off”?! Stop kidding yourselves!

    • http://www.facebook.com/kent.culotta Kent Culotta

      Interesting how language changes. To be “laid off” was originally a gentler way of saying that you had been fired. So now “laid off” is too harsh?

      • http://twitter.com/zoepiel Zoe Piel

        Being fired usually means that it was for cause–you screw up and you get fired. Being laid off usually means that the company can’t afford to keep you on anymore, even if you were a great employee. That’s why laid-off employees can collect unemployment (in the U.S. at least), but fired people can’t.

    • Polecat

      I agree. “Transitioning out of the company” sounds Orwellian. Why not just say “screwed”?

  • http://www.facebook.com/people/Alex-Dudley/39610885 Alex Dudley

    Wow. This is pretty bad. Is this becasue Rise of the Guardians underperformed? Will Dreamworks still try to release 3 movies annually, starting next year? WIll more work be outsourced? Will it be done at the China studio since the India unit’s going through layoffs as well?

  • Yoram Benz

    Perhaps the bar and budgets are set too high. Trying to only churn out massive blockbuster hits and if not go bust is a very risky business approach that gambles with people livelihood. One could only hope that a more diverse spectrum of animated features and companies arise. story-driven indie animated features anyone?

    • http://www.facebook.com/adamparkerart Adam W. Parker

      “story-driven indie animated features anyone?” – I’m working on it Yoram.

  • http://twitter.com/SarahJesness SarahJesness

    Oh, this is terrible! I hope the people laid off can find new work. I wonder why DreamWorks is having such big layoffs?

  • shadypotential

    Anonymous , Saturday 8/13/11 12:35 AM
    Supply and demand. They over hired new talented staff that was released from other large studios or the talented unemployed artists that were out there. Then they shaved the senior or over paid staff off the books. Dreamworks and Disney are pretty similar now.”

    doesn’t sound that bad to be honest. glad some unemployed got work.

  • observant one

    So much for Dreamworks illustrious “Five Year Plan”

  • Joseph Bernados

    That was when Disney was the only animation studio around. It was also a time when you could simply re-release movies to earn more profit, before the age of home video. We live in very different times now where films live and die by their opening numbers.

    As for Dreamworks’ lay-offs, I think it’s simply because they had to push back 2 movies in their development and now have all these people with nothing to do. That’s two whole animated features that usually feature hundreds of staff for just one. It just looks alarming because they’re all under the same studio.

    • mee

      #ThingsWereDifferentThen:

      In his pursuit of excellence, Walt Disney gambled everything on the success of a film more than once. He sold his car and cut his own salary to complete “Steamboat Willie.” He put every cent he had (and could borrow from the Bank of America) into “Snow White,” and staked his studio on “Cinderella.” Had any of those films failed, it probably would have meant the end of his career.

      http://articles.latimes.com/print/1992-01-05/entertainment/ca-2336_1_animated-films

      • Joseph Bernados

        You have to put it into perspective that in those days, animation was pretty much a labor of love for those involved and not the big business that it is today. For a real comparison look at a studio like Laika, not the big power players like Disney or Dreamworks. The reason movies have to make money faster than later nowadays is because they are tied in with sponsors and advertisers and a plethora of third party companies that put a lot of stake on the movie being a success. Sure, a hidden gem could be rediscovered and be a hit later down the road but none of that would make any difference to all the other companies that would not make back their investment right away. All those billboards and toys are not going to still be on the shelves 5, 10 years after a movie bombs.

    • mee

      #ThingsWereDifferentThen

      Milt Kahl: You see, after the war, I think the studio only had enough money to meet the payroll for six weeks. It was a very marginal thing. And I believe it was about that time when we all took a voluntary cut in our salaries. And that went on for about a year or two until they got back on their feet again.

      http://youtu.be/l_yC0-fGawc?t=7m25s

  • Mel Gribson

    Not to mention they laid off all their touring staff last month.

  • John Halfpenny

    Interwoven with all these thoughts about quality versus quantity is the sense that animation fans will go to see anything. I understand parents taking their kids to see a familiar franchise. What I don’t get is the many readers of this site who don’t support new and innovative projects while paying up to see every sequel or blandly big box blockbuster out there. If we don’t exercise good critical judgement, why do we whine when crap pictures get big box office results.

    • Rab Smith

      I’m not especially surprized at this: the movie business has always been a ‘user’ industry, and today it seems more like a sausage-factory than ever—I worked at Amblin under some of those who run Dreamworks today, and the situation at that time at least was just disgusting: the studio Boss wouldn’t even look at test animation I was doing unpaid at the weekends—in fact, once he made it plain was displeased to see me coming in to work on original material……..everyone at entry level just seemed to be lumped into a specific cookie-cutter shape, irrespective of their potential—-a real eye-opener for me, and frankly a depressing experience.

  • Vi

    Well, for your information Dreamworks Oriental (ie. China) is currently hiring for TV work (HTTYD) this year and the feature film (KFP3) production out there starts in 2014. Just saying.

  • Skip

    Sorry man, I wasn’t trying to be offensive I was just stating my opinion. I will admit that I don’t know what production was like on any of the Studio’s films. I guess what I was trying to say is that Dreamworks has done really great work, I loved Both Panda films, Train your Dragon and Prince of Egypt for example. While I don’t know what it was like to work on these films, I do know what the end results are like. I saw How to train your Dragon 3 times in the theatre, and Both Panda films twice in the at the theatre, bought the art of book for all three films, and have the DVD’s because I liked them that much. These are movies that I will happily pay for more than once because they are so good. On the other hand I left the theatre half way through A Sharks tale, and I was equally dissatisfied with Schreck the third. It’s true that these films might have made money, but if I go to the theatre to see a film that I walk out of before it’s over, than it’s going to make me less interested in seeing future releases from that studio. What little I know about Me and My Shadow sounds amazing and I can’t wait to see it, but I am willing to wait as long as it takes in order to make it good, and if it is I will happily pay to see it more than once and buy the art of book.

  • Hoganilly

    Whatever the cause of this, we know it’s NOT the fault of “…One Incredible CEO.” Look at this stroke article from a financial website. The article is dated February 4th, yesterday, the day this all went down. http://www.fool.com/investing/general/2013/02/06/this-is-one-incredible-ceo-16.aspx

  • Verna

    This is troubling… I thought Rise of the Guardians was really successful! It was certainly one of the greatest movies they’ve made aside from Dragons in my opinion. It’s a shame that they’re downsizing though and its not very encouraging to the animators being layed off as well as aspiring students. I’ve also read that they were also overhiring too… I guess they had to lay-off to keep themselves afloat.

  • M.

    Mr. Silver, with all due respect, this has nothing to do with overtime or artists working for free (as we saw from your youtube video rant and I agree with you on, but let’s leave it there).

    Individual awareness? Social media? …Huh?

    This has to do with DreamWorks having a disastrous flop in Rise of the Guardians, changing their business strategy and downsizing on production at the cost of some of the best talent in the world.

  • Jason

    Valve and Naughty Dog are pretty close to how a Coop is.

  • Blues

    Wait. If they love what the director is doing with it, why is it going back into development?

  • Joseph Hudak

    Latest news is that the schedule shake-up was at the request of 20th Century Fox. With that it mind it makes a bit more sense why these layoffs happened. Releasing 2 films in 2013 instead of 3 pretty much forces DW to cut down the excess workload and lay people off who would have otherwise worked on the third project. The under-performance of “Rise of the Guardians” seems to be a main factor in 20th Century Fox’s decision.

    Not trying to defend it, merely trying to find the cause for this unfortunate circumstance.

  • http://twitter.com/jordanolling Jordan Olling

    Were the films not developing well? (And I don’t mean developing in the sense of drying film strips or negatives.)

  • http://www.facebook.com/dryheaves.daily Dryheaves Daily

    Welcome to Rome.