300 Digital Domain Employees Lose Jobs; “Legend of Tembo” Shuts Down Production; John Textor Ousted

Tembo

Awful news out of Florida this morning. Digital Domain announced today that as part of “a strategic realignment that will enable it to focus its resources on its core business,” it will shut down its new Port St. Lucie, Florida studio Tradition and halt production of its first animated feature The Legend of Tembo. Per the studio’s press release:

As a key part of this strategic realignment, DDMG has begun the cessation of its Port St. Lucie operations by reducing virtually its entire Port St. Lucie workforce, retaining approximately 20 employees who will remain as part of the wind-down.

According to a Cartoon Brew commenter, 300 people lost their jobs this morning. The breakdown: “About 100 on Tembo, 50 or so on VFX, 100 or so doing Stereo Conversion work, and about 50 or so misc. employees.”

One artist who was let go tweeted, “A very sad day for the Digital Domain Tradition studios family. I’ll miss the whole Tembo crew,” and followed up with, “In related news, I’m looking for work! I’ll have an updated portfolio online later today.”

Other Digital Domain studios will remain open according to the same press release: “DDMG’s studios in California and Vancouver intend to continue to operate without interruption, as will the Digital Domain Institute, based in West Palm Beach, Florida.

Further, John Textor is stepping down:

John C. Textor has resigned, effective immediately, from his positions as Chief Executive Officer and Chairman of the Board of Directors of DDMG, as a member of the Board of Directors of DDMG, and from all positions as an officer and director with all subsidiaries of DDMG.

Digital Domain executive Ed Ulbrich has been promoted to Chief Executive Officer of Digital Domain Productions. Ulbrich has been with the company since its founding in 1993. According to DD’s corporate website, Ulbrich is “the chief architect of its commercials business, including Mothership.” He has exec-produced the vfx for over 500+ commercials, as well as the studio’s Academy Award-winning vfx in Titanic and The Curious Case of Benjamin Button.

I wrote at the end of August about how Digital Domain was on the brink of disaster due to Textor’s reckless management. What was written then is appropriate to reprint today:

There are already many victims in this situation. I feel awful for the artists who are working on Digital Domain’s first (and potentially last) feature The Legend of Tembo, as well as for all the other Digital Domain employees. I feel bad for Florida citizens who handed $132 million of their taxpayer dollars to a reckless and clueless businessman. I feel outraged for the incoming students of Digital Domain Institute who may have to perform slave labor because Digital Domain doesn’t believe in federal labor laws.

But you know who I don’t feel sorry for?

John Textor.

UPDATE (2:10PM ET): TCPalm.com has spoken to multiple artists who have been let go in Florida:

“Today’s the last day, there wasn’t much to be said. Just everybody apologized and said this is something that’s very hard for everybody,” said Philip Rosado, a digital artist. Rosado said he moved here from Vancouver, Canada, and had been working for Digital Domain for about a year. “Gotta get on the horn and find work,” he said. “I got two babies to feed, a wife to take care of, a roof to put over our heads. It’s not about me. It’s about my family.”

They also have a statement from Scott Ross, who started Digital Domain in 1993 with James Cameron and Stan Winston:

“It really breaks my heart when a company is started, and a company moves employees 3,000 miles away to a new home with a promise of a great future with the knowledge that there’s a strong possibility that the company would be out of business or that it would shutter its doors. It’s unconscionable to me that you can upset a human being’s life and a family’s life in the way that this company has.”

This photo taken by TCPalm photographer Will Greenlee is captioned: “A Port St. Lucie Police Department officer is stationed Friday at the gates of Digital Domain Media Group Tradition Studio as workers leave the building with their possessions.”

UPDATE (3:40PM ET): Watch local news coverage from WPTV:


UPDATE (4:05PM ET): Read the resignation letter of CEO John Textor.


  • Ex-DD Tradition Employee

    Just to get a more accurate figure out there, there were more than 300 of us who lost our jobs today. About 100 on Tembo, 50 or so on VFX, 100 or so doing Stereo Conversion work, and about 50 or so misc. employees. A sad day indeed.

    • mee

      Are you guys owed back pay or benefits? I’ve read through all the comments and it seems like this is a corporate fleece of the taxpayers, just like Wall Street, where the CEO loots the company and it fails, leaving taxpayers and everyone but him on the hook. Occupy… ?

      Makes me wonder if you all might occupy the premises and do the work and put out the product WITHOUT Textor and DD? See the 2004 documentary The Take, about Argentina workers doing just that.

      http://www.imdb.com/title/tt0426596/

      Maybe Florida would side with YOU… if Florida has a stake in DD and the right to claw back some of its lost funding. Apparently you might have to hurry before DD liquidates the facility and equipment.

      http://www.nakedcapitalism.com/2010/11/town-may-seize-factory-to-prevent-dismantling-by-vengeful-owner.html#comment-238118

      Think back too to Republic Windows in Chicago. When the company failed and locked them out in 2008 while still owing them benefit pay, they occupied. Last I heard they occupied again in 2012 and want to become owner operators.

      I’m an airhead but that’s what this makes me think of. It also makes me think of Matt Taibbi’s articles on Jefferson County Alabama and how JPMorgan’s financing scam for a sewer project led them into “the most expensive municipal bankruptcy ever in the US.” (wikipedia) Jefferson County taxpayers are screwed, there’ve been massive services and job losses, some ex-officials are in jail, but even with penalties and forfeitures JPMorgan is still doing quite nicely I believe and of course they’re not the ones in jail. Don’t know if that’s an appropriate analogy here, but Glen’s comment below about how Florida’s $132 million loss is really $500 million with interest makes me wonder.

  • Steph

    Sad day for many talented artists at the PSL studio…

  • Dave

    Let me guess, they don’t have to give the $132 million back to the State of FL , right ?

    Never did seem like a wise choice to build an expensive state-of-the-art studio building without ever having actually made a successful feature film before. Most start-up animation studios rent inexpensive warehouse facilities or space in an existing business park until they have a hit film or two under their belt.

    And will be interesting to see if DD continues with plans to open studio facilities in China.

  • Pedro Nakama

    Tembo really is a legend now.

  • http://artnote.blog.com Stephen

    The Port St. Lucie Mets will need a new corporate sponsor for their park.

  • http://twitter.com/virtualbri Brian

    Ugh, so Tembo wont even be finished (in Florida at least)?

    Sucks for all those artists.

    How much did Senior Management made last and this year there?

  • Hoganilly

    So true about the facility. When Decision One for starting a new studio is so wrong, one can only imagine the turmoil in the Story Room. There’s a way to make money in this business, fellas. It requires a lot of good sense first.

  • http://mediocremind.thecomicseries.com J. Gibbs

    Sad as it is to know that so many good folks lost their jobs in an industry fraught with competition and small number of openings, frustrating as it is to know that the state of Florida has been ripped off out of this whole deal, it’s at least some small comfort to know John Textor is done bragging about slave labor and driving studios into the ground.

    Unless, of course, someone else is insane enough to hire the guy.

    Please let nobody else be insane enough to hire him!

  • Moni

    I had a weird feeling about DD Florida when I talked to the recruiter last year. They were growing too fast for the 2 yr studio projections. I was wary of that. Im glad I didnt move to Florida take a job there.

    • Glen

      Yes. That was in order to get the tax breaks. They were supposed to hire something like 500 people within a year–and keep them fully employed for 3 full years. Taxpayers got screwed again by vulture corporate greed.

      • mee

        http://www.tcpalm.com/news/2012/sep/07/state-has-tools-in-place-to-recoup-money-given/

        Under limited legislative and agency oversight, former GOP Gov. Charlie Crist signed off on state money for the Port St. Lucie project in 2009. … Three years later, the studio cut 280 of its 300 workers. Digital Domain is on the hook to create at least 500 jobs with an average salary of $64,233 by 2014.

        (my emphasis)

        Moni, were you offered a $64,000/yr job, or is that Textor’s salary averaged with 500 others, including the students who pay to work?

        How sweet:

        Crist approved Digital Domain’s incentive deal in 2009 after lawmakers waived a required review of the project by Enterprise Florida. The change came in a budget amendment proposed by then-Rep. Kevin Ambler, R-Tampa. The amendment also peeled back another layer of oversight by the Legislative Budget Commission, which features lawmakers from both state chambers.

        Ambler left the Legislature in 2010 and joined Digital Domain’s board last year. He receives $20,000 a year and $2,000 for each board meeting he attends.

        “:-(

        Also, in this story they’re only talking about a $20 million grant the state gave DD, which they say Florida can claw back, with no mention of the $132 million tax break.

        • mee

          Actually I wasn’t sure if the taxpayer $132 million was a tax break or what. Found this:

          http://www.pbpulse.com/news/entertainment/movies/digital-domain-how-port-st-lucies-special-effects-/nPMbq/

          June 1, 2012

          In 2009, the company got a $20 million state grant and $51 million worth of land and loans to bring an estimated 500 animation jobs to Port St. Lucie.

          For the West Palm Beach school, the city has contributed a $10 million grant and a $15 million loan. In all, Florida has promised $132 million in cash, land, tax credits and financing to the company.

          (hmmm, 20+51+10+15 = 96? Leaves $36 million unaccounted for? What else is in the pot?)

          Since the school as opposed to the studio apparently hasn’t crashed yet (hasn’t been built yet?), maybe all is not lost? Interesting story, says they are running the exact same Florida plan in Abu Dhabi:

          And just a few weeks ago, Digital Domain announced a project in Abu Dhabi that is the twin of the Florida operation – a post-production studio combined with a digital college in a facility of 150,000 square feet, financed by $100 million in government grants.

  • crtoons

    YES! Finally that bonehead loses his job! Too bad it’s on the backs of all of our fellow artists down there in Port St. Lucie.

  • Tim Hodge

    I was freelancing for them, so I still have other work. I just hope my fellow artists land on their feet soon. It was really a great crew. Very talented, and fun people to work with. I wish them all the best.

  • d. harry

    Amid, you are truly a psychic!! you certainly had me thinking that where there is smoke there is fire from your recent posts. Very sorry for the Artists who may have left other jobs to move and work for those bozo’s, and whose worlds have suddenly been turned upside down.

  • http://mattmaners.blogspot.com Matt Maners

    But Mr. Textor you said the whole loan default thing was just a matter some contractual jargon and was just a misunderstanding between the bank and DD. Well obviously it was a bit more than that wasn’t it John. In fact it was so bad that they threw you out on the street and shut the whole place down and put 300 employees out of a job in these weak economic times. Sad that people lost their jobs but on the other hand it brings about a small smirk on my face and many others I am sure that you no longer are the one calling the shots.

  • annonoumys

    My best wishes to all the staff out in Florida. Terrible! Especially for all those who took their families out and bought property and set up for the long term!

  • http://www.animatorisland.com/ J.K. Riki

    I feel bad for all involved in this situation. Yes, ALL of them, including management who made mistakes. I’d imagine none of us are immune to making mistakes, and we’d prefer not having dirt kicked at us when we fall. Of course I’m also aware of the ego boost that comes from doing the kicking, I just hope more people can avoid going that route. Everyone involved is affected, whether they were the ones who made the mistakes personally or not.

    Anyway, new opportunities for a lot of animators. I hope you find great success in what the future brings!

    • Glen

      Less about just “mistakes, “. More about a fundamental lack of understanding of the film business–especially when it comes to creating original content. Who DIDN’T see this coming over a year ago? Fools.

  • Mike

    John Textor has made FAR too many ‘mistakes’ at this point to deserve any of my pity. Good riddance.

    • Jason

      His ‘punishment’ is a 16 million pay package. How cruel.

  • Robert Redford

    You can’t build an animation studio in this financial environment and pay directors 350k a year, thats just ridiculous!

    • akira

      paying 350k per year to a director of a film that has potential to gross over 100 million is not too outrageous.

      the outrage is hiring a full crew without having the money required to complete the film.

      don’t blame the director, only the producers. otherwise you can reason that every crew member was overpaid

      • Robert Redford

        I’m not blaming the director only, read what I said in all my posts. But the reality is everyone is responsible one way or another. I’m an artist but the day of artists placing the blame only on the suits, producers and other non creatives are over. Again the problem was the whole venture was underfunded and when you have two directors calling a venture that had over 100 million a start up shows how ignorant to the process everyone was. If it was a start up why be paid 350k, take a lower pay. In start ups you have individuals that put in their own money, don’t always get paid , or even pull their own money to make payroll. No matter how you slice it it a waste a of money. Funny how you talk about the potential of a movie making millions, well this one won’t even see the light of day because of greed and irresponsibility.

        • mee

          Everyone always wonders, what would Walt do? Here I am wondering, what would Roy do?

          • Glen

            Asking “what would Walt do” is what nearly killed the Disney Studios.

            Walt’s dead. And for that matter—so is Roy.

          • mee

            @Glen: Can’t help it, I still wonder. I wish I knew what you know. Did they wonder what Walt AND Roy would do? Roy was always there for Walt, yes, and the two of them (+ all the artists/technicians/employees) pulled it off even when the studio was in the deepest straits? When things were desperate, they didn’t get careful they got brilliant? Snow White, Cinderella, they bet the world on each of them? Always loving and enabling each other, always a team? And Theo was always there for Vincent, without Theo we wouldn’t have had Vincent as long as we did, or maybe at all, yes? That kind of thing, I don’t think of Disney Studios past Walt dying of audacity or love. I’m silly. I wonder.

            Thanks.

  • Eyebot

    I do feel sad for the staff that lost their jobs because of Textor and disastrous mismanagement! I heard some even relocated to Florida just to work on that feature. I wonder if there is anything else in terms of work locally they can bounce back to? With that type of infrastructure in place, one would hope a more responsible animation studio will take the opportunity and set home there.

  • Floyd Norman

    Sad but not surprising. An old producer warned me about this business years ago. These are his words, not mine. “It’s a perfect way to steal money.”

  • Barney Miller

    I’m sure the directors salaries had nothing to do with the studio shutting down. Assuming that number is correct, it’s no where near ridiculous compared to what Textor made.

    • Robert Redford

      The directors salaries are not the reason the studio shut down but it does show how clueless Textor and many of the other folks in charge were. And yes I agree on what Textor was being paid was even more ridiculous seeing that he also gave himself a raise.

      And the number is correct which makes me want to blow my top, monumental waste of money. In fact when you add two directors salaries, one producer, and Textor thats a burn of of almost 2 million just for 4 people. Your not even throwing in all the other expenses and overhead, and you think these things don’t factor in when a studio shuts down.

      Do the math!

      • Barney Miller

        No Redford, I don’t think the director’s salaries had anything to with the studio shutting down.

        You seem to think that a feature film could be made for nearly nothing.

        I’m a director myself and although I don’t make near that amount, that number is certainly not outrageous for an experienced feature animation director.

        Hiring directors, board artists, designers etc. as well as paying rent on a place to work, is simply the cost of doing business.

        This had everything to do with mismanagement. If the company had been managed properly, and a firm business plan instituted, there’s no reason why DD shouldn’t have been able to release at least one film- regardless of the cost of the directors and crew.

        • Robert Redford

          Barney,

          Yes a film does have to have money to be made but the budget can be modest, a director does not have to be paid 350k! I could make several really well animated short films for that money, and pay myself and a substantial crew.

          There is cost of doing business but these kind of numbers can be supported by Disney or Pixar not DD in Florida. I realize what a director can make, but again when you have large budgets you can sustain this. Every article that has come out about DD in the last two years has always been about CASH FLOW!!

          When did I say a feature film should be made for nearly nothing, I never said this. I said that paying a director 350k a year is ridiculous in this financial climate.

          Part of the mismanagement that you talk about is Textor thinking ” I pay two directors 700k and they will make me a fabulous film, when only one of them was a director with ONE feature under his belt. This feature film was made at Disney in the day when money was flowing heavily, said director goes to California, is in development on a film for something like 7 years, gets kicked off the project, then convinces Textor to give him a job.

          Aaron Blaise complained on his Facebook post about being underfunded. He even called Digital Domain a startup, what kind of start up has access to millions from the state and goes to ring the bell at the Stock Market.

          They were all ignorant of what it takes to make a film when it comes to timelines and money. To date the feature film they were working on has probably spent anywhere from 5 to 7 million, thats close to the budget The Secret of Kells was made for. Film can be made smarter and cheaper, but when knobs expect to get paid 350k a year the budgets will spin out of control when a studio is being mismanaged.

          • Glen

            And that”one film” under his belt was as co-director, and wasn’t a very good film, and lost money.

            “You seem to think that a feature film could be made for nearly nothing. ”

            People like Bill Plympton seem to do just fine, and the films are great!

        • Sarah J

          I don’t know much about the business, but… Don’t such large salaries mostly just go to directors with experience, or directors in big studios like Disney? Feel free to correct me, again, I don’t know much about the business, but Digital Domain is a small studio and so far, they haven’t made a big feature film and they don’t have a lot of money. If you’re running a studio that has never released a feature length film and the directors you’ve hired don’t have any big directorial names under their belt, it’s probably not a good idea to give them huge salaries.

          • Glen

            DD is not a “small company” when it comes to the industry. They have over 2000 employees at 6 DD facilities around the world. Running a visual effects company is NOT THE SAME as running a company making feature animation.

          • Sarah J

            I figured “small company” was the wrong phrase. But they’ve never released a movie on their own, most of what they’ve done is special effects for other movies. Because they’ve never released their own feature-length movie, it seems like kind of a bad idea to put a ton of money into one, and it seems like a bad idea to give such a huge salary to one person. Digital Domain may not be small, but they’re not Disney or Dreamworks. They aren’t at the level where they can sell movies on name alone, or on the popularity of previous movies. The other, bigger animation companies can easily afford to pay big salaries to directors, but DD paid large salaries to two directors who had very little experience directing. (I believe only one of them has directed a movie, and it was a movie that didn’t do so well) I feel it kind of shows a lack of financial planning.

  • Taylor

    It’s super sad. From all these articles Textor sure seemed like a jackass, but I was still rooting for them to get the film out and then hopefully just squeeze him out or something. It really sucks that him going down is at the expense of all those people.

    PLUS its freaking Florida. It’d be less jarring if it were LA or NYC, as people would have a chance of finding more work locally. But Florida? Such a bummer.

    I’ve relocated twice with my family for work, and luckily its panned out. My heart goes out to all of the victims in this, because I know I’d be out of my freaking mind right now if I were in their shoes. Wishing you all the best!

  • http://brandonjamesscott.com Brandon James Scott

    Sad for all the hard-working artists that were caught up in this.

    And also, Amid – great work! You certainly brought attention to this story recently when few others were talking about it.

  • anonymous

    Shouldn’t the people who started this company be taken out in handcuffs? They took $132 million from the state of Florida.

    • Glen

      Ultimately, it’s far more than that. Closer to $500 million, when interest rates on those loans are factored in.

  • http://cartoonsforbreakfast.blogspot.com Brian C.

    Such a shame, but unfortunately not very shocking. I wish all of those employees the best of luck. So much for my adopted home state getting a chance to shine.

  • Daniel

    Sad day for everyone let go. Everyone’s going on about justice for Textor, but the truth is the suits never lose. He got out with his money and will be back at the helm of some other studio in no time. And even if he isn’t, he doesn’t need to work another day in his life if he doesn’t want to. There’s no justice there.

  • Mel

    So many people on this blog were in Amid’s face a few months ago, when he sounded early warnings about Textor.

  • http://mattmaners.blogspot.com Matt Maners

    Someone there at FSU may want to update their website…you know because there isn’t a DD in florida anymore. http://ddinstitute.com/about

    • http://www.behance.net/gallery/Matte-Painting/4659355 Mike Inman

      Good point Matt. I wonder if it’s possible for the FSU students who paid for the privilege of working at Textor’s boondoggle to now get their fall tuition payment back? Maybe a lucky few can transfer over to a legit animation school such as RCAD/Sarasota or CalArts

  • http://www.behance.net/gallery/Matte-Painting/4659355 Mike Inman

    Amid-
    Thank you for your intrepid reporting on this story. Nobody else had the guts to report on this except you, until after the fact. My thoughts go out to all the good and talented people that lost their jobs today and are now wondering how they will feed their kids and pay their mortgages. This whole thing played out like a Bernie Madoff scheme, complete with corrupt politicians, kick-backs, the defrauding of taxpayers, etc. Also, the concept of having starry eyed students pay to work for a studio with the promise of production experience smacks of exploitation and is morally bankrupt.

  • http://mayersononanimation.blogspot.com Mark Mayerson

    They should have learned from Max and Dave Fleischer and Disney. No animation studio has survived in Florida.

    • jay b

      Mark, the Florida equation has nothing to do with it… It’s the LA suits that are making the decisions… When the WD Florida studio was shut down, we were making better movies than the Hollywood studio…. Back to back blockbusters and a crew that was second to none…

      • Jason

        Has nothing to do with the crew or ‘Hollywood’ and everything to do with freebie top heavy tax credits and a race to the bottom.

      • http://mayersononanimation.blogspot.com Mark Mayerson

        I was being ironic.

  • Mat H

    A surprise to no one.

  • http://www.AndrewBlodgett.com/ Andrew Blodgett

    For anyone from Digital Domain who lost their job — Blue Sky and Reel FX are hiring (good luck to you)
    http://blueskystudios.com/jobs/ —-
    http://jobs.reelfx.com/positions/reel-fx-port-st-lucie-florida-recruiting-event-217

  • Sarah J

    That’s a shame, but I guess we should’ve seen it coming. Really sucks for all those people losing their jobs, and it’s too bad that The Legend of Tembo got shut down, I would’ve gone to see it. Hopefully the other workers can find jobs.

  • Steve M.

    A real shame all those artists had to lose their jobs, all because of one reckless, idiotic CEO.

  • http://www.davidfreedman.co.uk David Freedman

    So I looked up Tembo on Youtube, you know, hoping to see a trailer or clip or something… and the ONLY thing I got was this of them opening the bell on the stock exchange. Speaks volumes.
    http://www.youtube.com/watch?v=7Pv8RvW8x1o

  • ChillRobSki

    Hi Amid,

    Is there anyway Cartoon Brew can sponsor a donation drive or social media job connection threads for these artist and there families? My wife and I would definitely donate, ask our employers to look at a resume/portfolio and even give a contact for a laid off worker if possible.

    I’m not sure how this would work or if there are privacy or legal issues but I don’t want to just read about this tragedy. I want to help! Thanks Amid, Cartoon Brew and the animation community for listening. We are a community of big hearts and generosity! Lets show our colleagues what we are made of. My apology for my inarticulate post.