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Ahead of the release of the feature Wallace & Gromit: Vengeance Most Fowl, employee-owned Aardman Animations is laying off around fifteen percent of its core staff, or 20 of its approximately 130 non-freelance employees.

The layoffs seem to be taking placing largely among management as the majority of Aardman’s artists are project-specific freelancers who are not considered staff. During 2022 and 2023, the studio employed between 286-310 freelancers. With core staff and freelancers combined, the total headcount at the studio was 417 people in 2023.

One-third of the layoffs are voluntary, according to a report in Deadline, while others may return to the company as freelancers. The company is also adding new roles, such as a senior licensing manager and a sales executive, to help sell library titles like Wallace & Gromit, Shaun the Sheep, and Chicken Run, which are responsible for a significant portion of the company’s profits.

Aardman said that the reduction in staff would give the company more flexibility to “navigate the current challenging market conditions,” which it attributed to a combination of “the uncertainty of future energy costs, high inflation, the cost-of-living crisis, and attempting to keep up with paying market rates to attract and retain talent.”

In its 2023 earnings report, published last Thursday, the studio revealed that it had registered a pre-tax loss of £550,135 ($720,000) in 2023, in contrast to a pre-tax profit of £1,561,027 ($2 million) in 2022. Turnover at the studio slipped from £31.7m ($41.4 million) in 2022 to £26.7m ($34.8 million) in 2023.

The company revealed in that filing that it would have been profitable in 2023, if not for the series Lloyd of the Flies.

The company decided to take an impairment charge on Lloyd because it does not believe that it can ever fully recoup costs on the production. Per the filing:

The series Lloyd of the Flies, which was delivered in 2022, was showing a significant value of unrecouped costs at the end of the year. Although well-received on release, performance of the brand has been adversely affected by current very challenging market conditions. Actual revenues for the year were reviewed alongside forecast revenues for future years, and it was decided that the value of the remaining costs held on the balance sheet should be impaired by £1,750,000 (net of associated tax credit). The Lloyd brand continues to be promoted and sold and is expected to recoup its remaining costs.

In addition to the upcoming Wallace & Gromit feature, Aardman has recently completed a second season of Very Small Creatures, greenlit a seventh season of Shaun the Sheep, and has produced a new pilot for a potential series called Sugarloaf. The company is also producing interactive projects like Wallace & Gromit in The Grand Getaway vr experience and the upcoming video game Chicken Run: Eggstraction.

Additionally, Aardman produces commercials and runs the Aardman Academy, a series of courses available to partner institutions that were used to train 176 students in 2023.

Amid Amidi

Amid Amidi is Cartoon Brew's Publisher and Editor-at-large.

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