Dreamworks Animation has decided to lay off 23-25% staff in coming weeks in wake of weaker-than-expected performance of the studio’s Rise of the Guardians which was released in November 2012. Studio employs over 2000 people. DreamWorks is currently the largest animation employer in the Los Angeles area; the Animation Guild alone represented over 825 DreamWorks artists as of last month.

Dreamworks also announced that they will release 2 movies instead of three this year. The layoffs  are expected to hit the Glendale-based animation studio’s production, technology and overhead functions. This also  includes people from India and PDI. Several meetings where arranged to announce the unfortunate news. The term ‘layoffs’ was substituted by ‘transitioning outside the company.’ No single film project in development will be targeted, though DreamWorks Animation CEO Jeffrey Katzenberg said that  Me & My Shadow, which had been slated for release by Fox in March 2014, is being taken off the schedule indefinitely. Mr. Peabody & Sherman, which was set for a Nov. 1 release, now shifts to the March 7, 2014, slot.

According to the analysts, Dreamworks Animation will lose $96 millions on “The Rise of the Guardians” .  The film cost $145 million to make and posted roughly $261 million in global box office ticket sales —far less than other, more successful DreamWorks projects.

In August, DWA entered a five-year distribution deal with Fox, which will release its films globally beginning with The Croods on March 22. Turbo will follow on July 19, followed by Mr. Peabody & Sherman on March 7, 2014, How to Train Your Dragon 2 on June 20, 2014, and Happy Smekday! on November 26, 2014.

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