Dreamworks Animation could be shutting down operations at its major production facility in India in early-2017. An announcement was made to the studio’s 300+ employees on Thursday by general manager Damien de Froberville.

The news, if true is especially shocking because prior to the Comcast acquisition of Dreamworks, Dreamworks CEO Jeffrey Katzenberg had been aggressively growing the India studio. A news story from January 2016 had reported that the studio was set to expand from 260 to 350 employees.

The company is being cryptic about what is happening. De Froberville told the web site Animation Express, “DDU is not shutting down. I do not have any comments.” Studio manager Adi Shayan said, “[A]ll I can say is it’s not that black and white and there’s more to it.”

Dreamworks partnered with Technicolor in 2008 to open DreamWorks Dedicated Unit, Technicolor India (DDU) in Bangalore, India. The goal was to create a fully-functioning unit of Dreamworks in India, with the ambitious goal of creating work at the same scope and quality level as the American Dreamworks, and do so seamlessly, using the same high-end production process.

Whether the studio had managed to reach that goal in full, it was well on its way. DDU has made contributions to most Dreamworks animated features in the last few years, including Puss in Boots, Penguins of Madagascar, Kung Fu Panda 3, the newly released Trolls, and the upcoming Boss Baby.

Clearly, whatever is happening at DDU is part of a much bigger restructuring. There are big questions about the future of Dreamworks’ feature animation operations, and it is assured that Comcast-NBCUniversal will make changes, even if we don’t know specifically what those changes are at the moment. The rumor mills are churning though. Former Dreamworks employee (and vfx/cg industry observer) Daniel Lay posted the following on his Twitter this morning:

This is a developing story and will be updated as details become available. Cartoon Brew has reached out to Dreamworks for comment, and we will update if they respond.

Here is the Dreamworks Dedicated Unit’s sizzle reel from five years ago:

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