DreamWorks Animation continues to try and cut costs so that the studios can stay afloat. Now layoffs there are expected to reach as many as 500 and the studio has announced that it will cut back from three new movies per year to only two.
A number of its senior executives have left or are leaving. DreamWorks Animation marketing head Dawn Taubin, its chief operating officer Mark Zoradi, vice chairman while Lew Coleman and chief creative officer Bill Damaschke are among those departing.
In a corporate restructuring DreamWorks Animation will take a pre-tax charge of $290 million most of it to be recorded in the fourth quarter and with $110 million in cash payments, mostly this year. The studios expect to save $30 million this year and as much as $60 million in 2017. The announcement lifted DWA shares about 3.2% in post-market trading.
The company’s shares have plummeted almost 40% over the past 52 weeks.
Jeffrey Katzenberg, CEO of DreamWorks Animation, said in a letter to investors, “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.”
Katzenberg also said during a call with analysts after announcing the reorganization, “My time and my focus needs to be on making blockbuster films. We have the people to do it. That’s where my energy is going to be focused. Feature animation is the core of our company. Getting our feature film business back on track is our number one priority.”
About cutting back on the number of films to be produced annually he added, “I think we were top heavy and given that we are right sizing the entire operation and focusing the company on the businesses we are in today, rather than businesses we imagined we might be in, this is the right sizing that we need.”