Troubled DreamWorks Animation has begun laying off employees. Some reports say that up to 400 of its workers will be let go, most from its Glendale and Redwood City, California facilities where it employs 2, 200 people.
The job cuts come in addition to 350 that were lost in 2013.
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2014 was a turbulent year for the animated film studios led by Jeffrey Katzenberg. “How to Train Your Dragon 2” was a huge hit bringing in $618 million at the worldwide box office. But “Penguins of Madagascar” and “Mr. Peabody and Sherman” were disappointments for the studios with the latter leading to a $57 million write down.
And DreamWorks is still hurting from its 2013 flop “Turbo.” The studio is the target of a class action suit over the box office bomb that coast it millions. A number of stockholders feel that it deliberately hid the truth about an expected write down over the losses from the movie. Even the SEC is looking into the allegations.
Steve Hulett, business representative for the Animation Guild, which represents about 800 unionized workers at DreamWorks, told the LA Times, “The reason they are struggling is their business model, for better or worse, is built around each picture performing and if a picture doesn’t perform they have to look at staffing and ways to cut.”
