MUMBAI: In a major restructuring exercise, DreamWorks Animation will be cutting down on the number of movies it will produce each year, which in turn will lead to a loss of approximately 500 jobs across all locations and all divisions of the studio.
Following a full review of the business, the company will focus its feature production from three films per year down to two, maximize its creative talent and resources, reduce costs, and drive profitability. DreamWorks Animation is implementing this plan to restructure its core feature animation business to ensure the consistent and profitable delivery of films.
Under the leadership of newly appointed co-presidents of feature animation Bonnie Arnold and Mireille Soria, the studio's core feature animation production will now focus on six specific movies for the next three years - one original film and one sequel each year - including Kung Fu Panda 3 (18 March, 2016), Trolls (4 November, 2016), Boss Baby (13 January, 2017), The Croods 2 (22 December, 2017), Larrikins (16 February, 2018) and How to Train Your Dragon 3 (29 June, 2018). Captain Underpants, which will be produced outside of the studio's pipeline at a significantly lower cost, is scheduled for release in 2017. The company's 2015 release, Home, will premiere domestically on 27 March.
“The number one priority for DreamWorks Animation's core film business is to deliver consistent creative and financial success. I am confident that this strategic plan will deliver great films, better box office results, and growing profitability across our complementary businesses,” said DreamWorks Animation CEO Jeffrey Katzenberg.
DreamWorks expects to incur a pre-tax charge of approximately $290 million in connection with the restructuring and related items. These costs are expected to be incurred primarily in the quarter ended 31 December, 2014, with the remainder in 2015 and 2016. The plan will result in total cash payments of approximately $110 million incurred primarily in 2015. The restructuring plan is expected to be substantially complete by the end of 2015 and expected to result in annualized pre-tax cost savings of approximately $30 million in 2015, growing to roughly $60 million by 2017.
