Disney’s Biggest Rival Lays Off Staff, Shifts Production Outside USA

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shrek and donkey confused

Credit: DreamWorks

Will this affect the animation industry as we know it?

Tigress (Angelina Jolie), Mantis (Seth Rogen), Viper (Lucy Liu) Po (Jack Black) and Monkey (Jackie Chan) in 'Kung Fu Panda'
Credit: Dreamworks Animation

In the course of over a century, Disney’s reach and impact have grown immensely, leading to the creation of its dedicated streaming service, Disney+ (Disney Plus). Disney has constructed a vast realm of entertainment that seamlessly accommodates the various franchises it has acquired, including Pixar Animation Studios’ Toy Story series, the extensive Star Wars saga from Lucasfilm, and even James Cameron’s highly successful Avatar franchise.

Hiccup and the rest of the characters from How To Train Your Dragon film franchise
Credit: DreamWorks Animation Studios

Related: Pixar Faces Serious Backlash Over Declining Quality, Putting Out “Laziest” Movie Yet

Disney has undoubtedly made a few major rivals in its lifetime, with its biggest one being the company that Disney more or less created itself.

Disney’s Biggest Competition

Antonio Banderas as Puss in Boots in 'Puss in Boots: The Last Wish' (2022)
Credit: DreamWorks Animation

The history of The Walt Disney Company and DreamWorks Animation Studios is exemplified by a colorful rivalry, originating from DreamWorks’ origin to exist explicitly as competition for Walt Disney Animation Studios. The company was initially DreamWorks SKG, where “SKG” represented the initials of director and producer Steven Spielberg, former Disney executive Jeffrey Katzenberg, and music executive David Geffen. These three individuals joined forces after Katzenberg’s departure from The Walt Disney Company, following alleged disagreements with then-CEO Michael Eisner and internal conflicts involving Walt Disney’s nephew, Roy E. Disney.

Presently, DreamWorks Animation Studios operates as a subsidiary of Universal Pictures, a division of NBCUniversal, aligning it with the Comcast conglomerate.

The Prince of Egypt banner poster
Credit: DreamWorks Animation

Related: Fans Rejoice “Return of Cinema” After New ‘Shrek 5’ Update

DreamWorks Animation Studios has gained recognition for its array of animated feature film franchises, including well-known series such as How to Train Your Dragon (2010), Kung Fu Panda (2008), The Boss Baby (2017), Trolls (2016), and the Shrek (2001) franchise.

However, it was DreamWorks’ initial foray into 2D animation projects that marked the company’s beginnings, notably with the acclaimed films The Prince of Egypt (1998) and The Road to El Dorado (2000). The studio also expanded its portfolio to encompass more commercial-oriented ventures like the Trolls franchise, including Trolls 2: World Tour (2020), The Boss Baby and The Boss Baby 2: Family Business (2021), the Madagascar franchise, as well as the less critically acclaimed Shark Tale (2004) and Bee Movie (2007) animated productions.

Ruby Gillman from Dreamworks
Credit: Dreamworks Animation

A Major Shift in the Animation Industry

Recently, it appears that Disney’s foremost competitor has been experiencing a surge in success. Thanks to the overwhelmingly popular and visually striking Shrek spin-off film, Puss in Boots: The Last Wish (2022), featuring Antonio Banderas in the role of Puss in Boots, this animation studio has garnered significant audience acclaim and substantial box office earnings.

This success poses a substantial challenge to Disney’s longstanding position as the industry leader. In contrast, Disney appears to be focusing heavily on remaking their classic films.

DreamWorks' Trolls 3, Poppy and Branchs
Credit: DreamWorks Animation

This year, Ruby Gillman, Teenage Kraken (2023) unfortunately debuted to middling reception.

Recently, Deadline covered some rather shocking news regarding Walt Disney Animation Studios’ most premier rival.

According to the report, a DreamWorks Animation (DWA) spokesperson told Deadline:

DreamWorks Animation reduced its workforce by approximately 70 positions. Roles affected were across corporate functions, feature, television and technology departments as part of an overall cost-reduction.

This comes amid more news of DreamWorks’ trajectory shift as a company.

DWA has admitted to “making cuts and slashing 4% of its staff” as a result of “the downward cyclical turn in the business, rising production costs and the strikes”.

But that isn’t all that’s changing with the animation giant. In fact, CartoonBrew also reported on the fact that DreamWorks would be “shifting away from producing films fully in-house at its Glendale, California studio” to “rely more heavily on third-party studios” — specifically Imageworks headquartered in Canada. According to DreamWorks, this action is a part of the company’s ongoing cost-cutting measures.

Clearly, things will shift in the animation industry in the coming months and years. Whether this is for the best, or if it opens up another opportunity for rivals like Disney and Sony, is anyone’s guess.

What do you think about DreamWorks outsourcing production outside the US, and laying off its staff? Share your thoughts in the comments below!

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