DreamWorks Animation cuts 500 jobs; focuses on sequels

Sad news from DreamWorks Animation. The LA Times reports that the animation studio has cut 500 jobs in a restructuring effort and will scale back its film production and close its studio in Redwood City.

From the LA Times:

The announcement is a bruising moment for Katzenberg, who once presided over one of the industry’s leading animation studios. However, DreamWorks Animation has struggled to replicate the success of its earlier “Shrek” and “Madagascar” films.

Katzenberg also took pride in DreamWorks corporate culture and generous perks, which made DreamWorks a regular on Fortune’s best places to work. He told Wall Street analysts that the reductions were a painful but necessary step to right the studio. He also vowed to take a more hands-on role in running the studio’s core feature animation business.

Cartoon Brew reports that the studio has scaled back its production and will release only two features per year – an original and a sequel.

The studio is cutting back its slate to two DreamWorks-produced films per year: one original film and one sequel. To save money, the studio will also begin outsourcing production for some of its films, like, Captain Underpants, scheduled for 2017. Films such as that will be produced ?at a significantly lower cost.?