Motion picture company Annapurna Pictures has laid off its CFO, James Pong, in a round of staff layoffs, Variety reported Tuesday. Seven employees were laid off, including two assistants and four creative executives, representing nearly 10% of the staff, sources said.
Though the company has yet to release an official statement, a spokesperson confirmed to Variety a "modest number of layoffs due to the current economic climate" had been made. Senior leadership will also take pay cuts to help shoulder the financial burden, they said.
Annapurna is the latest in a string of entertainment companies to lay off workers, following The Walt Disney Company, Blumhouse Productions and Twentieth Century Fox. But it's the first to dismiss the executive positioned considered crucial for navigating today's financial uncertainties.
Cost efficiency during the pandemic has led many entertainment companies to face difficult choices, as stay-at-home mandates prevent filming and production and movie theaters remain closed.
On Tuesday, UCB announced it would be closing its New York locations permanently, preceding a summer of canceled programming and pre-existing financial difficulties. Even Twentieth Century Fox, which brings in $4.5 billion per year, laid off 120 employees in March.
Talent agencies are following the same formula: lay off entry- and mid-level employees, and reduce executive pay. Creative Artists Agency, United Talent Agency and William Morris Endeavor leaned on executive cuts as a first resort, while ICM Partners and Paradigm Agency moved to lay off staff.
Pong's dismissal signifies a larger shift towards white-collar workers fearing for their jobs, beyond the entertainment industry alone. Indeed, this may extend to CFOs, despite their vitally important role during today's economic challenges.
"White-collar jobs are at an all-time high going into this crisis," Daniel Zhao, senior economist at Glassdoor, told the Washington Post last month. "Everybody right now is focused on layoffs from restaurants and retail stores, but there really is this underlying risk affecting workers in every industry."
In the case of Annapurna, its "fiscal conservatism," according to sources, stems from Larry Ellison, billionaire founder of Oracle and father of Annapurna CEO Megan Ellison. Overhead at Annapurna remains a concern of Paul Marinelli, head of Ellison’s financial estate, another source said. But a company insider disputed this, telling Variety the layoffs were made "in the name of efficiency."
The company has had no choice but to lean on efficiency over the past several months. In February 2019, it changed its focus from distribution to production. Simultaneously, it expanded a partnership with movie giant MGM and spun off its distribution wing into independent United Artist Releasing, The Wrap reported. Later in 2019, Annapurna broke up its New York office, ordering its theater and film staff to shift to remote work.
Reports circulated last summer that Annapurna was exploring the possibility of a bankruptcy filing, which the company denied, insisting it was simply "restructuring its relationship with banks."
In August, Variety reported Annapurna, following material losses of tens of millions, had resolved more than $200 million in debt from lenders, and would be sustaining business going forward with financing from the Ellison family alone.
Since the bankruptcy chatter, the company continued to expand. In late March, it formalized a publishing contract between its video game department, Annapurna Interactive, and Swedish indie game developer, Simogo.