“Sizable” layoffs are coming. It’s just a matter of how many, and when. DreamWorks Animation may cut up to 500 employees in the next few months, sources tell Deadline. That’s potentially 23% of its 2200-strong animators, tech, and support staff, axed in the wake of a flop and key release date changes for Mr. Peabody And Sherman (moved off the 2013 calendar and into 2014) and Me & My Shadow (sent back into development).
This news couldn’t have come at a worse time with the recent distress at various VFX facilities. DWA has been a relatively stable enclave that treated VFX professionals exceptionally well and with that they were able to attain something many of us struggle so hard to have: decent work hours, a house, marriage, children, and dare I say, a life.
A Compounding Challenge
Animation facilities like DreamWorks and Disney have always had their fair share of layoffs. What dampened the blow was usually there was always an ebb and flow between the VFX facilities and animation studios for a laid off artist to find a job. Now the work is available this time but the major problem is that subsidies have forced professionals in the industry to chase their jobs country-to-country, project-to-project.
How does a DWA VFX professional with a home, a partner, and kids pack it all into 2 suitcases and globe trot around the world and afford it? This is why part of the Campaign To End VFX Subsidies was targeted at VFX professionals at animation studios like DreamWorks. While things were good there, many were unknowingly exposed to the huge risk of VFX subsidies.
Importance of Unions
The argument has always been that if VFX facilities had margins like DreamWorks, many of the bad conditions would go away. This is why some advocate that facilities join a trade organization instead of the workers joining a union. I’m an advocate for both and this recent event at DreamWorks is exactly why I argue that the Hollywood industry is so heavily unionized:
Even with huge margins, great conditions, and their own IP, studios will gaps in between projects leading to layoffs.
Luckily for the unionized artists laid off at DreamWorks LA, many of them will be able to keep their health insurance for their families for up to 12-18 months. Unless there is a special provision for the non-unionized artists of DreamWorks PDI, they will lose their health insurance in the first month they are laid off.
A union, trade organization, and a ban on subsidies don’t individually solve all the problems but together they solve the majority of problems.
Other Facilities in Turmoil
Regardless, the situation has recently turned extremely bleak. Late in the year Digital Domain filed and emerged from bankruptcy and just this week we learned that Rhythm & Hues was on the verge of bankruptcy. The other night fellow blogger VFX Law fired off a series of tweets that boldy claimed other facilities were in deep trouble also. Let me be clear that I haven’t been able to verify any of this and I get a lot of emails with various claims that I refuse to put on this blog but the information coming from VFX Law is usually spot on analysis.
Also, I’ll be giving an update on our latest progress in the Campaign to End VFX Subsidies. Be on the look out.