Report: Layoffs To Hit Netflix Animation As Part Of Division Restructuring

An unknown number of people will be laid off from Netflix Animation in the coming weeks, according to a report published in Variety and confirmed by the streamer.

The layoffs are part of a restructuring process that will also result in less animation produced in-house. Netflix intends to acquire more projects from third-party producers through output deals, a cost-effective alternative to producing its own content. The streamer has previously signed output deals with Sony Pictures Animation, Nickelodeon, Illumination, and Dreamworks Animation, among others, and now it appears that it will rely more heavily on such deals as it slims down its own animation division.

The report in Variety also identified two original animated films that have been put in turnaround. The first is Escape from Beverly Hills, which hadn’t been previously announced, and the second is Tunga, an African mythology film based on the Bantu-speaking Shona people of Zimbabwe. The latter film will remain at Netflix, where it will be sent back to development.

After a heady launch in which the streamer spent lavishly to grow its animation division, reality set in with a multitude of projects that didn’t meet the streamer’s own performance expectations. These disappointments led to multiple rounds of layoffs in 2022, including 70 people in May 2022 and 30 people in September 2022.

It is perhaps ironic that as Netflix’s animation division continues to contract, it is also beginning to find its creative footing. Netflix won its first Academy Award for feature animation earlier this year with Guillermo del Toro’s Pinocchio, and recent animated films it has produced or funded, such as Nimona and The Monkey King, have garnered strong viewership numbers. The company has at least two more audience-friendly features set to release before the end of this year: the Adam Sandler-headlined Leo and Aardman’s Chicken Run: Dawn of the Nugget.