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EXCLUSIVE: “We’re back,” was the upbeat message delivered by Technicolor CEO Caroline Parot to thousands of global employees during an online Town Hall last month.
Six weeks later, the iconic film company is in ruins and thousands are out of jobs after one of the swiftest and most painful corporate implosions in recent years. In the space of just a few days in late February, the company cratered in the U.S., UK, India and Canada, while operations in France continue amid a receivership process. One executive from a rival VFX firm described the scale and suddenness of the damage to us as a “holy shit moment for everyone”.
Technicolor had been on shaky ground for a number of years but the full-scale implosion still took many by surprise, even among senior leaders at the group. It was in stark contrast to Parot’s virtual Town Hall message at the end of January, which Deadline has been sent by a source.
The former Europcar CFO struck an upbeat tone, telling global staff at the outset of that meeting: “We will see progress in our pipeline and delivery. We’re opening the year with excitement. We acknowledge we have a lot to do but we see our trajectory as being better. You will each have to help, you each have a role to play, because we are back. The last two years weren’t good enough but we are back and we’re rebuilding our place in the market. We’re delivering fantastic, innovative concepts and we need to accelerate. We will celebrate success quarter by quarter…”
“I don’t know how this could have been the message,” the head of a leading VFX company told us in response. “The company hasn’t been right for two years” while adding “this is sad and unfortunate. A lot of very good and talented people have lost their livelihoods.”
In internal emails to staff weeks later, Parot acknowledged the group’s demise, noting that sought investment hadn’t been found and blamed “a difficult operational situation resulting from post-covid recovery, a costly and complex separation from the previous group followed by the writers’ strike leading to a slowdown in customer orders causing severe cash flow pressures.”
Slate
Paris-based VFX and post giant Technicolor Group, an iconic and historic brand more than one hundred years old, owns prolific labels including The Mill, MPC, Mikros Animation and Technicolor Games, whose recent work has spanned hundreds of movies from the Harry Potter films to Mufasa: The Lion King, and Oscar winner Emilia Perez. Global headcount was understood to be somewhere between 4,000-10,000.
Technicolor’s X feed from recent weeks gives the impression of a company in relatively rude health. It celebrates an Annie win for Orion And The Dark, multiple VES nominations, the company’s work on the highly rated Super Bowl ads for Budweiser ‘First Delivery’ and Disney movie Lilo And Stitch, as well as events celebrating Mufasa: The Lion King, and the upcoming release of Snow White.
Disney’s Snow White was just one of a handful of studio movies and series the Technicolor Group was working on at the time of its implosion. Also on the docket for Disney was the aforementioned Lilo & Stitch. Tom Cruise and Paramount‘s upcoming Mission Impossible was also on the slate, as was the second season of Netflix and MGM’s Wednesday with Jenna Ortega. According to our internal sources there were also around six other studio projects whose names haven’t been revealed.
Disney and Paramount sources we spoke to were bullish that the implosion wouldn’t impact their projects. The two Disney movies are pretty much done and MPC was said to be a secondary or tertiary VFX partner for Paramount on Mission. Netflix declined to comment.
We are aware of at least one rival VFX firm that is in talks with studio clients about taking on some of the work Technicolor was carrying out. Deals will depend on schedules, budgets, and capacity.
Financials
The company’s implosion has been global, though the degree of damage has been hard to ascertain in each country. Technicolor has said next to nothing publicly. Its comms team hasn’t responded to multiple requests for comment.
For those in the UK, the picture has been bleak. As we reported last week, the majority of its 400-strong UK workforce has been made redundant and the majority of its activities have ceased with administrator Interpath trying to salvage what it can from assets. According to a local source, the London Wardour Street office is being stripped of everything of value.
One VFX vet who had worked at Technicolor in the UK for years told us: “It’s a bloody mess. They’ve pretty much not paid us for February and shut down. There are many angry people, as you’d expect. Some are going to really struggle, including those in the UK on work visas, of which there were many.”
How could it come to this so quickly?
Warning lights were flashing last year, according to a Technicolor UK financial report filed in December. It makes for tough reading and gives an insight into the extent to which the company had been struggling. Losses for the year ending 2023 came to £52M, up £12M year-on-year. Revenue decreased 29% year-on-year. The report raises concerns over the UK division’s ability to continue as a going concern. It notes that the group carried out multiple restructuring projects, including to executive positions and the workforce. The cuts were extreme, with the UK division losing 62% of headcount, from 1170 employees in January 2024 to 446 in November 2024.
Right at the end of the report is an interesting nugget about a refinancing agreement from lenders signed in March 2024 to the tune of 95M euros, which would be paid in three tranches across 2024. So, money was pumped in last year.
The broader group had been seeking larger investment or new owners for some time prior to this latest collapse. As reported by the FT last fall, the investment funds and former lenders that own Technicolor Group (including Farallon Capital, Barings, and Pimco) had been in talks with potential buyers that included “groups of private equity companies and Middle Eastern sovereign wealth funds, as well as rival media groups.” Those talks seemingly didn’t go anwyhere good.
Meanwhile, back in 2020, Technicolor SA filed for Chapter 15 in a bankruptcy court in Texas amid a restructuring effort. In 2022, Technicolor Group separated from the hardware division of Technicolor SA.
Despite this picture, some senior executives told staff last week that the implosion came as a shock to them. We managed to track down a Town Hall delivered last week by Technicolor India CEO Biren Ghosh to the Indian team, which is understood to total around 2,000 employees. Ghosh claims that news of the sudden shut down was as surprising to him and some other senior leaders as it was to rank and file staff.
He said: “The India leadership team was brought to this stage of finality alongside all of you; we were not privy to the situation that we would receive a mail out of the blue saying that Paris has gone into receivership or liquidation, or whatever it is, and I myself have been in touch with many of our global leaders, many of the people that run our brands in other parts of the world, and they were equally unaware of the suddenness of this particular event, which came to them as it did to us, without advance notice or warning.”
In the virtual meeting, Ghosh gives no explanation for the crash but acknowledges that Technicolor India is “financially and operationally not moving forward, and we’ve reached a stage where, unfortunately, we’re unable to function as an organization”. During the call, he also confirms that the company won’t be able to pay staff for February via regular pay roll. The same message was conveyed in the UK.
Fury & Action
The implosion has left former staff furious and dejected. One Indian employee described the move as “shocking, heartbreaking” and “unethical” in a LinkedIn post: “If organizations can hire us professionally, make us work professionally, and expect us to resign professionally, why can’t they shut us down professionally. Why should employees bear the consequences of poor management decisions while leadership walks away in silence? We demand transparency, rightful compensation, and answers.”
One commentator on X claimed: “The Indian employees basically power the company. All these tentpoles get made because of slave labour” in a country where wages are lower and labour laws are different.
According to a social post this week by the KITU union in India, some Technicolor employees have agreed to file an industrial dispute against management.
Shaun Severi, Head of Creative Production at the Mill, claimed in a LinkedIn post that 4,500 had lost their jobs in 24 hours: “The problem wasn’t talent or execution — it was mismanagement at the highest levels…the incompetence at the top was nothing short of disastrous.”
According to Severi, successive company presidents “buried the company under massive debt by acquiring VFX Studios…the second president, after a disastrous merger of the post houses, took us public, artificially inflating the company’s value — only for it to come crashing down when the real numbers were revealed….and the third and final president, who came from a car rental company, had no vision of what she was building, selling or managing.”
One U.S. VFX producer expressed frustration at the wider industry response to the company’s demise: “Why is Hollywood silent on Technicolor? Thousands of artists were left without jobs overnight and an entire chapter in VFX history came to an abrupt end….Where are the statements from actors, directors and writers? VFX is an invisible art. It’s praised when it impresses, overlooked when it struggles.”
Another VFX vet agreed in a social post: “When will we decide to unionise? We’ve underpinned ALL the big movies for decades. We ensure that Mark Ruffalo can become the Hulk, that the Millennium Falcon can perform the Kessel Run in less than 12 Parsecs, that Harry can go to Hogwarts…But our industry is treated like shit by the studios. Movies make billions yet VFX studios still have to fight over bids to reduce costs. We’re still on some race to the bottom.”
In news that may be of some comfort, two days ago it emerged that gaming studio TransPerfect had acquired Indian-based Technicolor Games. As part of the deal, the company said it would “welcome all Technicolor Games India employees back into the Bangalore facility, the company’s largest, to ensure continuity of business for all clients.”
In the U.S. a group of employees have mobilised quickly to set up Dream Machine FX. In the UK, workers are trying to understand their rights with some telling us they believe employment laws may have been breached but that claims will be hard given insolvency.
Local union BECTU last week organized a Q&A for workers. The entertainment group told us: “The news of Technicolour going into administration is devastating for Bectu members, VFX workers and the wider sector. We are working to understand the situation and doing all we can to support our members who are facing redundancy. This is symptomatic of an incredibly challenging time for the UK’s film and TV industry, including the ongoing impacts of a prolonged production slowdown that have hit the VFX sector particularly hard. Many businesses are having to make difficult decisions but it is the workforce who disproportionately bear the brunt of these. Being part of a union is one of the best ways to ensure you have a collective voice at work.”
Some industry analysts are predicting a shift to smaller, more agile teams in both VFX and game development in response to Technicolor’s implosion. Niche creative houses could thrive. A lot of talent has suddenly hit the market.
“Happy shopping. The talent is still here,” Severi noted in his post.
