"Getting our feature film business back on track is our number one priority," boss Jefffrey Katzenberg explained the move, as part of which the company will reduce its output from three films a year, to two. "I want us to get back to making two great blockbuster films a year. We want to get back to basics here."
Several high level executives are also set to leave as part of the restructuring plan, for which the firm will take a $290 million pretax charge. The WSJ reported that co-founder Katzenberg referred to a "top-heavy" executive structure company when making the announcement, after which shares rose more than three percent in value in after-hours trading. Katzenberg told investors he is to take a more hands on role in film production, for which the budget per film is to be reduced to $120 million.
The job losses represent about one-fifth of the work force, and come after a string of recent box office disappointments for the studio, which is best known for hits such as Shrek, Madagascar and Kung Fu Panda. In recent years the company reported losses on such films as Rise of the Guardians and Mr. Peabody & Sherman, while sequel The Penguins of Madagascar, released in November 2014, also performed poorly at the box office.
