Netflix Animation Eliminates 70 Jobs, Drops Three Projects

Netflix Animation suffered another blow this month as the company eliminated jobs and dropped several projects.

What happened? Netflix has eliminated 70 positions at its animation studio, although the streamer tells us that none of those affected were full-time Netflix employees. The cuts were part of a larger set of cost-cutting measures which also saw the streamer lay off 150 full-time employees, mostly based in the U.S. According to a report by Variety, the studio has also canned several animated projects.

What will happen to the laid off employees? It is not known what will happen to the impacted animation employees, who were not full-time employees according to the streamer. However, the 150 full-time employees who lose their jobs are expected to receive severance packages starting at four months, according to The Hollywood Reporter. Conditions may vary however, with severance packages based on each individual staffer’s position and how long they’ve been with Netflix.

Which projects were cut? Titles which Netflix has confirmed have been dropped include Ava DuVernay’s Wings of Fire adaptation, preschool series Antiracist Baby, and With Kind Regards From Kindergarten. These drops are in addition to five other cuts which Netflix confirmed it had already made as of May 3. Here are some details about the project cuts announced this week:

• Produced by Warner Bros. Animation, Wings on Fire was based on the middle-grade fantasy book series of the same name by Tui T. Sutherland. Dan Milano (co-creator, Glitch Techs), Christa Starr (producer, Mystery Science Theater 3000: The Return), and Justin Ridge (supervising director/executive producer, Star Wars Resistance) were lined up as showrunners.
• Adapted from a kids book by the same name from scholar Dr. Ibram X. Kendi, Antiracist Baby was pitched as a series of animated vignettes set to music for preschoolers.
• With Kind Regards from Kindergarten had not previously been announced, but would have adapted Adam Kline’s popular kids book about a girl with a big imagination who is afraid of going to kindergarten.

Why so many cuts lately? Netflix has faced scrutiny in the first half of 2022 after a disastrous Q1 earnings report. The streamer lost subscribers globally for the first time in a decade, its stock plummeted, and stories about dead and dying projects began leaking, some dating back to months before. In response, Netflix executives proposed new regulations against password sharing, the possibility of ad-supported subscriptions, and – as we’re seeing this week – cutbacks to spending growth. There are also rumors circulating that Netflix is thinking about giving theatrical releases to more of its high-profile features, including a theatrical window of exclusivity.

How bad is it? For Netflix, the past few weeks have been unprecedented, but probably inevitable. Subscriber growth is finite, and in many major territories competing streaming platforms from major studios continue to pop up. It’s worth noting that any major animation studio regularly has numerous projects in development at any given time. Most are unceremoniously dropped without a public word. It should also be noted that the company is still profitable. Netflix posted $1.6 billion in profit over the first quarter of 2022, from $7.8 billion in sales. Those sales were up nearly 10% from the same period the year before.

Is Netflix giving up on animation? Definitely not. While Netflix is taking from its own animation studio with one hand, it’s acquiring and co-producing animated titles from third parties with the other. Recent deals at the streamer include an expansion of its current partnership with DNEG, picking up Ron Howard’s The Shrinking of Treehorn (produced by Animal Logic), a new three-picture deal with Japanese anime producers Colorido (Drifting Home, A Whisker Away), and the acquisition of Marmaduke (produced by Andrews McMeel Entertainment, Legacy Classics). Netflix also maintains one of the industry’s largest pipelines for original animation with several high-profile feature titles on the horizon including Guillermo del Toro’s Pinocchio, Henry Selick’s Wendell & Wild, and Nora Twomey’s My Father’s Dragon to name but a few.

Sorry, Marmaduke? Yeah. Netflix acquired the low-profile adaptation with an A-list voice cast earlier this year and debuted the film on May 6. It has not yet garnered a single positive review from any major media outlet that we could find, and sits at a 0% critical rating on Rotten Tomatoes with a 25% audience score. Despite the film’s critical woes, it reached 9th place on Netflix’s Top 10 English-language films for the week of May 2-8 with 7.01 million hours of viewing time. In its second week, it climbed up to number three on the same list, with 15.03 million hours of viewing time. By comparison, Richard Linklater’s Apollo 10 1/2, a Netflix Original animated feature, never appeared in the streamer’s Top 10.