‘Happy Feet Two’ Flop Leads to 600 Layoffs (Report)

Most of the 700 employees at the digital production studio behind the penguin toon are said to be on their way out

Due to the poor performance of "Happy Feet Two," 600 of the 700 employees at the digital production studio behind the animated movie have reportedly received their walking papers.

Employees at Dr. D Studios, which is based in Sydney, have been told they will be laid off in the coming weeks, according to IF.com.au. TheWrap was unable to reach Dr. D for comment.

The film was a sequel to 2006's Academy Award-winning "Happy Feet" — which grossed $384.3 million off a budget of $100 million — had only amassed an estimated $30.3 million worldwide as of Thursday.

There may be a silver lining for some of the employees, who have reportedly been offered a job at a new company that Kennedy-Miller Mitchell Films — which launched Dr. D as a joint partnership with Omnilab Media — plans to get off the ground early next year. KMM was founded in 1973 by "Happy Feet" director George Miller and producer Byron Kennedy.

In addition to the layoffs, KMM and Omnilab are now reportedly at odds, and there is the possibility that the partnership between the two companies may be dissolved.

Released on Nov. 18, "Happy Feet Two" has not found much success. Released in 3,606 theaters, it came in second at the box office in its opening weekend, grossing $21.2 million — despite an estimated budget of $140 million.

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"We obviously came in a little bit under our expectations on 'Happy Feet,' " Warner Bros. President of Distribution Dan Fellman told TheWrap. "The market expands enormously over the holiday. By next Monday, we'll know whether we're in good shape."

With three new family films released this week — "The Muppets," "Hugo" and "Arthur Christmas" — "Happy Feet Two" is unlikely to gain any further traction.

Dr. D Studios, which specializes in digital feature-film production and high-end special effects, had reportedly hoped to compete with Peter Jackson’s Weta Digital in neighboring New Zealand. The studio is also attached to the long-delayed fourth "Mad Max" film, "Fury Road"; Miller was the director, producer and writer for the first three installments.

Also read: Fourth 'Mad Max' Movie to Roll in Australia, Miller Says

According to DrDStudios.com, "Fury Road" is in pre-production, although the site also says that "Happy Feet 2" is currently in production. There are no current job openings listed on the site.