DreamWorks Animation Is Cutting 500 Jobs And Will Only Make 2 Movies Per Year Now

DreamWorks Animation is making some big changes.

The studio announced Thursday afternoon it will cut around 500 jobs and will reduce the amount of animated pictures it puts out for year.

According to the release, DWA will cut the number of films it makes from three to two per year.

The new strategy will involve releasing one original film per year along with a sequel to one of the studio's better known pictures.

The announcement comes after a string of box-office bombs and writedowns from the studio in the past few years including 2012's "Rise of the Guardians" and this year's "Mr. Peabody & Sherman."

Earlier this month, DreamWorks Animation announced Bonnie Arnold and Mireille Soria will now lead the animation department as co-presidents.

The two were lead producers on the studio's successful "How to Train Your Dragon" and "Madagascar" franchises.

The company's next film is an original animated feature titled "Home" with the voice talents of Rihanna and Jim Parsons ("The Big Bang Theory"). It will be released in March.

Here's the full release:

DreamWorks Animation (NASDAQ: DWA) is implementing a new strategic plan to restructure its core feature animation business to ensure the consistent and profitable delivery of the high quality films that audiences have come to expect from the studio. Following a full review of the business, the company will focus its feature production from three films per year down to two, maximize its creative talent and resources, reduce costs, and drive profitability.

Under the leadership of newly appointed Co-Presidents of Feature Animation Bonnie Arnold and Mireille Soria, the studio's core feature animation production will now focus on six specific movies for the next three years - one original film and one sequel each year - including Kung Fu Panda 3 (March 18, 2016), Trolls (Nov. 4, 2016), Boss Baby (Jan. 13, 2017), The Croods 2 (Dec. 22, 2017), Larrikins (Feb. 16, 2018) and How to Train Your Dragon 3 (June 29, 2018). Captain Underpants, which will be produced outside of the studio's pipeline at a significantly lower cost, is scheduled for release in 2017. The company's 2015 release, Home, will premiere domestically on March 27.

"The number one priority for DreamWorks Animation's core film business is to deliver consistent creative and financial success," saidDreamWorks Animation Chief Executive Officer Jeffrey Katzenberg. "I am confident that this strategic plan will deliver great films, better box office results, and growing profitability across our complementary businesses."

The overall reduction of DreamWorks Animation's feature production output will result in a loss of approximately 500 jobs across all locations and all divisions of the studio. DreamWorks expects to incur a pre-tax charge of approximately $290 million in connection with the restructuring and related items. These costs are expected to be incurred primarily in the quarter ended December 31, 2014, with the remainder in 2015 and 2016. The plan will result in total cash payments of approximately $110 million incurred primarily in 2015. The restructuring plan is expected to be substantially complete by the end of 2015 and expected to result in annualized pre-tax cost savings of approximately $30 million in 2015, growing to roughly $60 million by 2017.