Thursday, December 20, 2012

At DreamWorks Animation

I spent a chunk of my morning at the Glendale campus ...

The mood inside the Lakeside building was somber. Various staffers informed me about recent layoffs and personal service contracts getting rewritten during option time, with guaranteed end dates getting changed to "at will." I was told:

Surfacers and some others have gotten laid off and work transferred to India. Costs are lower there. A while back management laid off part of a department and told them the work was going offshore. They haven't told us things like that since, but people know that jobs are being shifted. ...

... Three or four years from now, who knows what will be over there? Or how much will be here? ...

Moving work to the sub-continent has been going on for a few years now, starting with Puss in Boots. It was a subject of the negotiations between TAG and the company last Spring. At that time, the Animation Guild agreed to concessions to keep work here in California. More recently, minds have been focused by news stories like this:

DreamWorks Animation Could Take $45M Write-Off For ‘Guardians’: Analyst

The studio could take the hit in its Q4 report, Lazard Capital Markets’ Barton Crockett predicts this morning, which might result in a 6 cent per share loss for the quarter vs his previous estimate for a 30 cent profit. Crockett figures that Rise Of The Guardians will end up generating $130M at domestic box offices, plus $276M overseas (similar to How To Train Your Dragon) with sales of 4.9M DVDs (compared to 6.1M for Megamind). What’s more, the analyst says that the “muted performance” of Guardians “is prompting us to pare back box office assumptions for the rest of the 2013 slate”

DreamWorks Animation, the only major stand-alone cartoon studio in the U.S., has been doing a graceful, high-wire act for years, turning out a string of box office hits. But no corporate entity is forever and always successful. Even Pixar has its occasional misfires, and now it's DreamWorks Animation's turn.

So belt-tightening is taking place. It's not a nice reality if you're a DWA employee who's getting notice, but as I said to one worried staffer, it's happened before at other L.A. studios, and it will no doubt happen again. The movie business is often a roller coaster.

Small consolation when you're on an unemployment line, but Hollywood jobs seldom last forever.


Site Meter