Bristol, U.K.-based animation studio Aardman is restructuring after losing $720k in 2023. These cost-cutting measures include eliminating 20 positions from its staff—roughly 5% of its 425 current positions. One-third of the departures were reportedly voluntary, and Aardman has expressed interest in rehiring some as freelancers. The studio said these losses were due to £1.75 million unrecouped costs from Lloyd of the Flies. Without that loss, the studio projected a profit of £1.6 million for that same time.
Aardman’s Losses and Cost Cutting
The Lloyd of the Flies series failed to meet its budget, resulting in a substantial revenue loss. As a result, Aardman is cutting substantial personnel to make up the shortfall. While Aardman would be open to rehiring them as freelancers, 5% of positions will be eliminated. An increase in production costs is partially to blame for these losses. Aardman claims that much of their loss was due to not making back recent project expenses. Lloyd of the Flies is the most prominent, with £1.75 mil in expenses. Discounting this loss, Aardman says they would have had a profit of £1.6 million.
Brand Value & Licensing
While cutting existing jobs, Aardman has created several new positions within the company. These include a senior licensing manager and a sales executive. They will be responsible for maximizing the value of existing Aardman IPs. This will most likely be done by licensing their existing brands to other studios. This appears necessary in the face of a decline in the brand’s value. By December 2023, Aardman’s revenue had declined by 16%, down to £26.7 million. In comparison, their annual profit at the end of 2022 was £1.56 million.
“It is no secret that the entertainment industry is experiencing much change and uncertainty. We have taken a proactive approach that focuses on our strengths. This will allow us to address these challenges while continuing to develop and produce award-winning work,” said Sean Clarke, the studio’s managing director, in response to the losses.
Final Thoughts
UK-based Aardman Studio is conducting a restructuring after a massive loss of $720K in 2023. This loss is primarily blamed on Lloyd of the Flies’ poor performance in 2022. This prevented the company from making back £1.75 million through sales. It’s generally accepted that without those losses, the studio would profit approximately £1.6 mil instead. Many of the causes for these losses can be boiled down to rising production costs.
However, some could also be as simple as Aardman overestimating the potential return of their projects. As part of this restructuring, several jobs are due to be cut to reduce overall operation costs. At the same time, they are adding new positions to try to capitalize on their brands. Some of these changes will likely be temporary and undone when the financial situation is remedied. However, others will certainly endure in the long term and remain a fixture for years. Whether these changes will be enough to stabilize their financial situation remains to be seen.
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