DreamWorks Animation will lay off approximately 350 employees, about 15 percent of its full-time staff, CEO Jeffrey Katzenberg and CFO Lewis Coleman said Tuesday during the company’s fourth quarter earnings call.
The company posted a loss of $83 million in the fourth quarter of fiscal year 2012 due to development costs and the poor performance of "Rise of the Guardians."
Those losses necessitated cutbacks at a company with about 2,200 employees, with most of the cuts hitting the production department.
Katzenberg previously recognized that DreamWorks Animation would be “adjusting [its] operating infrastructure costs,” but this was the first time he spoke publicly on the subject and the first time the company announced a number.
In explaining the move, he cited Chicago Mayor Rahm Emanuel, the brother of a certain high-powered Hollywood agent.
"Rahm Emanuel had that really great expression, ‘you need to take full advantage of every crisis that you face,’" Katzenberg told analysts. "'Guardians' was the first movie of ours, after 17 in a row, that didn’t work. When that happens, it really makes you rethink everything."
"We've taken this as an opportunity to significantly right size the whole enterprise here," he added.
Katzenberg said the company faces a new challenge from “broad four quadrant movies” rather than just more traditional computer-generated family films.
“It makes the need for quality release dates critically important,” Katzenberg said, using that to justify the company delaying “My. Peabody and Sherman” from this November to next March.
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