DreamWorks To Cut 500 Jobs, Produce Only Two Movies A Year

(RTTNews) - DreamWorks Animation SKG Inc. (DWA) Thursday said it will cut 500 jobs and only produce two movies a year as the film studio tries to improve the performance of its animation movie business.

The Glendale, California-based independent studio expects to incur a pre-tax restructuring charge of about $290 million, which would be incurred primarily in the fourth quarter and the remainder in 2015 and 2016.

The restructuring plan is expected to be substantially complete by the end of 2015 and will result in savings of about $30 million in 2015, growing to roughly $60 million by 2017.

DreamWorks, the studio behind 'Shrek', 'Kung Fu Panda' and 'How to Train Your Dragon,' said it will now focus on production of two films a year, down from three, to maximize its creative talent and resources and drive profitability.

"The number one priority for DreamWorks Animation's core film business is to deliver consistent creative and financial success," said DreamWorks Animation CEO Jeffrey Katzenberg. "I am confident that this strategic plan will deliver great films, better box office results, and growing profitability across our complementary businesses."

DreamWorks performance has been stuttered by losses made on its movies leading to hefty impairment charges. Some of the movies that failed to click at box office were 'Rise Of The Guardians,' 'Turbo,' and 'Mr. Peabody & Sherman.'

DreamWorks had merger discussions with Japan's third-largest mobile carrier Softbank Corp. (SFTBF, SFTBY), toymaker Hasbro, Inc. (HAS) and conglomerate 21st Century Fox Inc (FOXA, FOX). All three cooled off after initial talks.

The company said it will focus on six specific movies for the next three years, which includes 'Kung Fu Panda 3' (March 18, 2016), 'Trolls' (Nov. 4, 2016), 'Boss Baby' (Jan. 13, 2017), 'The Croods 2' (Dec. 22, 2017), 'Larrikins' (Feb. 16, 2018) and 'How to Train Your Dragon 3' (June 29, 2018).

DWA closed Thursday's trading at $21.31, up $0.63 or 3.05%, on the NYSE. The stock further gained $0.69 or 3.24%, in the after-hours trade.