DreamWorks Will Layoff 350 Employees

DreamWorks Animation announced yesterday that they will layoff 350 employees by the end of 2013. The news of the layoffs become public in early-February when the studio told employees that it was reshuffling its production and release schedule.

DreamWorks CEO Jeffrey Katzenberg talked about the layoffs with \The Hollywood Reporter:

“These things are very, very difficult to do. I would say it’s the hardest thing I’ve had to do since we started DreamWorks. We’ve never had to lay anybody off. It was against our culture. But it’s the right thing for us today, and it makes DWA strong going forward.”

Yesterday, the studio also reported that it would take an $87-million writedown on Rise of the Guardians, which represents the studio’s biggest money-loser since 2006′s Flushed Away, which resulted in a $109-million write-down. It should be made clear that a write-down is not an actual loss of money, but a reduction of the book value of an asset.


  • shadypotential

    Damn. I wonder how the director feels right now. knowing his movie tanking is the reason for the lay offs. it sucks. but it will always be “quality over quantity” and i wish Dreamworks would get that. Plus it also helps if the the CEO of your company is an artist him/herself instead of a businessman. i think thats why Pixar does so well because most of it is ran by former artists.

    • otterhead

      Again, Guardians didn’t “tank”. It did really, really well by normal standards. But since it wasn’t Kung Fu Panda huge, it was a ‘disappointment’.

      • shadypotential

        hey animations are a different breed of film. they dont follow the same rules as live action

  • Confused

    “We’ve never had to lay anybody off” that is simply not true, I worked there at one time with many others and guess what, we were laid off. Also last year they were laying people off so not sure how he can state this. People are laid off all the time in feature animation so please do not state that you never do it, just looks worse.

    • http://twitter.com/spitandspite Abel Salazar

      Pure curiosity, does you consider the end of a contract and non-renewal as a layoff? I did hear Dreamworks had a pretty good record for non-layoffs. I consider a layoff being let go mid-contract/deal memo btw

      • Confused

        Hey Abel! I use to work with you at Kenny Roy’s place. My lay off was end of contract but the way it is worded from JK is that they never layed off anyone and that simply is not true. DW has been downsizing for sometime now and be it a lay off at the end of a contract or part way through it is still called a lay off. Now to be fair though, DW was an amazing place to work and I do feel they tried to keep people around. I believe they should of stuck with 2 films every 1 1/2 years.

      • suspicious eyebrow

        By Katzenberg stating it is against their studios culture puts across the impression to the layperson reading that article that once you are hired at Dreamworks you are on payroll in-house indefinitely. It’s a distortion of reality. It sounds too good to be true for a studio that has seen its ups and downs over the years.

        I personally want to know how after 17 hits having one badly performing feature is able to take so many down with it. They hadn’t been saving up for a future flop? No contingency plan? Whats the deal?

        • http://www.facebook.com/people/Robert-Holmen/562023961 Robert Holmén

          Dreamworks HAS been saving their money. On average Dreamworks has been profitable but only slightly so after all the expenses of getting the movies out the door and into theaters is paid for.

          They have typically listed cash on hand in the $100-200 million range in their SEC filings, so when they have a quarter like the last where they actually lose $82 million, that’s a big bite. A few more like that and they’d have to start hocking things to meet the payroll.

    • Alex

      What Jeffrey meant is that the company, since it’s creation, has always grown. Of course there has always been “movement”, like in ANY company, often crews are beefed up to help finish a movie, and when the movie is finished people are then let go, etc… But as a whole the company kept on growing significantly trough the years, this is the first time (other then 10 years ago when the 2d to CGI switch accrued) that an actual significant percentage of the whole studio, regardless of specific project, had to be let go for an overall company downsizing.

  • raised brow

    I seriously question the statement of Dreamworks never laying anyone off before.

  • marti386

    “Katzenberg said the restructuring was necessary given the disappointing results of Rise of the Guardian”

    SURE, because a movie that tries to paint Santa Claus and the freaking Easter Bunny as some kind of Lord of the Rings style badasses couldn’t POSSIBLY go wrong.

    And I’m SURE that a movie about a genius dog based on a 50 year old cartoon today’s kids have never even seen will TOTALLY save the day.

    Seriously Jeffrey, YOUR the one who needs to be laid off.

    • otterhead

      Despite the fact that it was quite a wonderful movie and very successful by normal measurements. But when you’re dealing with a $250mm movie (before marketing costs), if it’s not one of the biggest animated blockbusters ever, it’ll be a write-down. That’s a silly gamble to make.

    • Nik

      I watched Rise of the Guardians last night with several adults whom I wouldn’t really call big fans of animation. They loved the movie and were a bit mystified when I informed them the film had flopped in theaters.

      I’m still trying to understand how DreamWorks spent 150 million apiece on Madagascar 3 and Rise and then made 742 million and 300 million worldwide on boxoffice and somehow that 742 million profit for 2012 still means layoffs. I will never understand Hollywood bookkeeping.

    • pingrava

      Call me crazy, but my “sorry no thanks” moment came during the preview – when I saw Santa Claus with f**cking tattoos.
      Real nice, Dreamworks. What’s next – Snow White as a meth-addicted hooker? Or how about hipsterizing Charles Schulz’s “Peanuts” and children’s books:
      Does This Look Infected To You, Charlie Brown?
      It’s Daddy’s Rent Check Charlie Brown!
      The Gimmee Tree
      Crack For Sale

      • Léa

        Well that’s a bit much…Do you realize it’s 2013? You can say fucking with two stars online which every child has access to and its fine but a purposefully silly santa can’t have tattoos on screen despite the fact that they probably see tattooed people every single day?

  • http://twitter.com/spitandspite Abel Salazar

    Anyone know where the majority of these are hitting?

    • Confused

      I think mainly “Me and My Shadow” is being hit the hardest and then probably cutting under performers across the board.

  • jorge verdugo

    rise of the guardians is too bad in story

  • Mike

    Amen. The character designs where what immediately turned me off, starting with the first trailer. Maybe even the first teaser image. I thin it was a case of trying too hard to faithfully reproduce Joyce’s designs from the book without doing enough to make sure the product was appealing in CG.

  • Toonio

    Leave it to the golden retriever to screw up and dig the facts under the tree.

    Wonder where the heck he got the idea that more low quality features was better for the bottom line.

    And one more reason to distrust Fortune’s best companies to work for list..

  • Dokeck

    Hey, they were appealing to many, the movie was just more niche than mainstream perhaps, it couldn’t cover the costs.

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

    I agree with this. Dreamworks is put in a situation that no indie animation studio should ever be in.

  • anakinbrego

    Laying off to outsource to their new studio in China!

    • Michael Sporn

      I believe the studio is China was built just to do films for China. If they outsourced it would be to India.

      • anakinbrego

        That’s what they are telling the public, I don’t buy it. In the long run all animation jobs will be done in Chinese studios where there are no labor laws.

      • barney miller

        Michael, that’s exactly what everyone was told when the India studio was created. I guarantee you DW isn’t just hoping to cash in on the Chinese market. They’re a global company.

  • alok

    Its interesting to note that studio Ghibli follows a similar make or break business . atleast used to in late 80s early 90s.but then again their market was japan first then the world.dream works is too global.n 3 movies a year for a global audience is a lot of strain. its like demanding 3 avenger movies a year. 2 will DO!

  • Ringtail Badger

    Has anyone asked the question if those people would still be on the payroll if they were doing KF Panda 3 in the US rather than opening a new studio in China?

  • brett

    Guardians was fine as a film, and would have been a commercial success if it had been produced for 60 or 70 million, instead of twice that much.

    Of course that would have meant fewer jobs then instead of fewer jobs now…

  • marti386

    I wasn’t saying it was bad, just an odd subject to take a gamble on. I saw the commercials and my first response was:

    WHAT. THE. LIVING. HELL.

    These mega budget movies cost WAY too much to risk on shaky concepts like this. Look at Wreck-It Ralph. THERE’S an exampe of making an excellent movie that has a concept that will pull today’s kids into the theater. Likewise with The Incredibles. When I saw the commercial for that, I was like “WOW. Pixar does superheroes!! I’ve GOTTA see that!”.

    I think the reason so many animated movies tank is because of the initial subject matter. I mean, Mr. Peabody? REALLY? Even Escape from Planet Earth did well, cuz kids like space aliens.

    I’m NOT saying we should Kowtow to the lowest common denominator (that would be fart jokes). But I think we need to start with a concept people actually wanna SEE. Cuz people will never KNOW how good a film is if we can’t get them into the theater. :-)

    • Tom

      In all fairness though, a movie about an ugly green ogre or a rat who wants to cook in a kitchen didn’t sound like the most appealing of ideas, but look at Shrek and Ratatouille. Hugely successful films with somewhat uninviting concepts. Any idea (OK, most ideas) can be a hit. Guardians definitely had a sense of appeal and promise, but it just wasn’t harnessed well enough, IMO. I think it could have been a MASSIVE hit if it had been marketed a bit better… especially if they had changed the title so no one thought of the owl film.

      I will say though, Turbo has a very odd premise. Interested to see where that will head.

  • ratigan

    All of this, and Katzenberg gets to keep his Hersholt Humanitarian Award?

    Hersholt Humanitarian Award
    Hersholt Humanitarian Award
    Hersholt Humanitarian Award

  • NorthernLights

    Sure thing, they already announced they’re opening a studio in China. And they call for ‘adventurous’ people, as they name it, to work there.

  • $Inthebaguette

    Just for context, Jason. What Illumination is doing is called outsourcing, sending production to a location with a cheaper labor force. It just so happens to be in Paris(where government subsidies aid in keeping costs down)… And if Illumination does release a ‘bomb” and studio production sputters(as DWA), the artists will absolutely be “laid off”. The difference being, in Paris, they will be supported very well by their government. So much so that most FR professional artists anticipate these jobless periods in order to work on personal projects. Eventually production needs will return to the studio and artists will be hired back. C’est la vie.

    • Jason

      I didn’t know they outsourced, I thought they just had strict money rules/

  • NicholasBing

    I think anyone who knew Jeffrey Katzenberg from the Disney Animation days would know what he’s like…..! I suggest watching ‘Waking Sleeping Beauty’……

    • Nik

      Wasn’t the character Hades in Disney’s “Hercules” based on Katzenberg?

  • Nik

    The only character designs that I really disliked were Jack Frost and Pitch Black. They were boring. Unfortunately those were the two main characters of the film!

  • Eric

    It has always seemed to me that belt tightening (layoffs) and going public go hand-in-hand. It’s an easy way for company’s to appear more profitable. Trim the “fat” so the bank account appears more full, that’s the general trick. And it works from a buisness standpoint but it greatly taxes the “machine”, putting more pressure on existing employees to wear multiple hats and pick up the slack. A great way to burn out your staff and ensure a future flop.

  • huh?

    Daniel that’s like saying animators shouldn’t be in charge of animating their own scenes… Did you think that one through first before posting?

    I’ll be the first one to agree that those designs were some of the most stale over-rendered ghoulish creations since Yogi bear but I don’t see where you get the idea that production designers shouldn’t have any say over their work. Its like you are convinced that the designers had free reign to design the most terrible looking characters imaginable, And THAT’S assuming they even had control over what the main product was supposed to look like.

    • barney miller

      Actually it’s not like that at all. I have yet to meet a production designer who is also a character designer. In my experience they are great at color, lighting and environmental design, but know very little about what makes an appealing character.

      Unfortunately, many studios (except Pixar) don’t really have character art directors. A designer designs a character, but doesn’t have the power to ensure it’s quality all the way to the end, because the production designer can trump them with the title.

      The best situations are when a character designer has a lead title OR is at least trusted by the prod designer and director to see a character through from drawing to final model.

  • Mac

    JK is a top businessman, but he’s just another businessman, and corporate business enterprise as codified and executed has been ambivalent to the employee for over a century. What did you expect. What did you expect.

  • shadypotential

    I was talking about dreamworks HUGE next slate of films. almost 3 films a year. you cant do that in animation. the story aspect goes down the drain

  • Polecat

    And they say the economy is recovering.
    Maybe they spent too much money on their advertising budget? Maybe it’s a bad case of “sequelitis”. I think people got tired of all those Shrek films (3 was enough) and then they topped the whole thing off with Puss in Boots. How did the most recent Ice Age movie do compared to the first two?

  • animator

    I worked on “me and my shadow.” its good, I wouldnt say its going back into development, the studio just didnt have a good release date for the movie. I was hired as a 2d animator then was let go because they only wanted to keep the bare minimun of people for a film that will be released a long time from now.

    • d. harry

      Thanks for the reply. Well, DW is certainly letting the press think that it is having to go get reworked. They should change that perception. Sorry you got laid off.

  • Perdo Nakama

    What does that big guy from Pixar always say? You have to start with a story.

  • Crystal

    Didn’t Katzenberg reveal that the celebrity actors’ pay won’t be cut? Why not get lesser-name actors who are just as right for the role and save a bunch of layoffs? (Otherwise, I would have assumed that laying off was the only option.

    • pingrava

      I’m not involved in the arts at all but have been a fan of animation all my life and pretty well versed on it’s history.

      It appears to me that a business person is exactly who you want running a studio. If memory serves, Shamus Culhane had a business manager who ran a lumber yard. Movies are a product to be consumed and enjoyed – no different than a Big Mac or a Honda.

      Business managers watch the bottom line, but they gotta be smart about it.

      Any account can tell you-to the penny – how much you will save by laying off 350 employees.

      But not one bean counter can tell you what you’ve lost in terms of knowledge, talent and experience – not to mention (and I hate this word) synergy. I work in engineering as a machine designer. We had a tight knit group for 5 years. Management would give us an assignment and leave us alone. We had fun and we were incredibly innovative and productive. You communicate with fewer words. You bounce ideas around, etc. You know what I’m talking about.

      Then a we were broken up, put on a time clock and had to account for every minute, thanks to some goofball foreign national from India who had to make his mark. Out came the spreadsheets, matrices, etc. I was written up for leaving ten minutes early, because my new manager thought that time was money. It is. But considering that we came in an hour early and also worked from home – this idiots attitude caused us to work a strict 40 hours a week. No more. No less. The ironic part? He wasted about an HOUR of my time discussing my transgression with a human resources rep.

      This ladies and germs is what happens when you unleash a 25 year old d**chenozzle with an MBA onto the world.

      So…productivity plummeted. And instead of upper management trying to figure out why 5 excellent, hard working designers were suddenly underperforming after five years, they did what any MBA dweeb would do.

      They laid us off. Combined they lost about 140 years of experience,not to mention the years learning and working with their products. So they decided to bring in 15 interns to do a fifth of the work we did. And they need 4 managers instead of one.

      I know I’ve strayed considerably from the gist of the post, but the best managers learn to trust their people, and LEAVE THEM ALONE TO DO THEIR JOBS. Once they start injecting their ignorance (unless, of course, you’re Walt Disney) and start thinking they’re geniuses, start looking for a new job.
      I’ve seen too many businesses fail thanks to this mentality – the restaurant investor who’s supposed to be hands off, now insists his girlfriend’s mac 7 cheese recipe gets put on the menu.
      If done right you have Disney, WB or MGM in the golden age. if done badly you get – well “Ishtar”.
      Finally – fixing the problems are tough too – especially when the ship’s sinking. An a*8hole manager will not admit he made a mistake because it shows weakness. And you can’t solve problems with the same mindset that creted them in the first place.

  • Susana

    I don’t understand why people seem so offended by the idea of Santa Claus looking pretty badass with tattoos. This movie was based from the books and North wore clothes similar to that of actual St. Nicholas’ clothing. I personally thought the tattoos were a nice touch. It made Santa more modern and should actually show people that having tattoos doesn’t made you some sort of punk (which seems to be the idea of a lot of people who don’t seem to realize that their kid is probably going to get a tattoo when they grow up, and that’s coming from an inkless person).

    Why are people so upset that DreamWorks took the stories and traditions, and made them something special and unique and different and NEW? I loved the movie. It reawakened all of my childhood beliefs.