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Pixomondo Lays Off 23 as Part of Consolidation Plan, CEO Says (Exclusive)

Thilo Kuther said the company is still in the visual effects business despite the elimination of Berlin office

Twenty-three people have been let go after Pixomondo shuttered its Berlin office last week, the visual-effects company's CEO and founder Thilo Kuther told TheWrap on Monday.

Pixomondo maintained five facilities in Germany in such cities as Frankfurt and Stuttgart and Kuther said it no longer needed to have a presence in Berlin.

"Berlin is not such an important market," Kuther said. "This is part of our consolidation."

Also read: Pixomondo, VFX Company for 'Oblivion,' Closes Berlin Office

TheWrap reported last month that Kuther laid off 20 visual effects artists while closing his Shanghai branch.

He said that the company's decision to close branches has to do with the cyclical nature of the visual-effects business and is not an indication of financial difficulties. He said that the company has completed several major projects, including work for the Tom Cruise movie "Oblivion" and HBO's "Game of Thrones," and has opted not to renew certain employees' contracts until work begins on other projects.

Also read: VFX House Pixomondo Shuts Shanghai Office, Will Move Away From Film (Exclusive)

The company which employed more than 800 people at certain points now employs roughly 600, Kuther said. He plans to reopen the Shanghai office Pixomondo closed this spring in July.

"There are cycles of production in any business," Kuther said. "Summer is not that busy a time for us."

He said that the bankruptcy and auction of Oscar-winning visual-effects company Rhythm & Hues last month had created an unfair amount media speculation about the health of other companies in the industry. However, other visual-effects companies including Digital Domain and Tippett Studio have suffered bankruptcy or severe cutbacks of late. 

The visual-effects industry has been buffeted by shrinking profit margins and globalization driven by fast-moving foreign tax incentives.  

Also read: VFX Flap Over Dwayne Johnson's 'Hercules' Work Going to U.K.

Kuther went on to clarify his earlier comments to TheWrap that Pixomondo was moving away from doing visual-effects work on feature films and focusing primarily on corporate clients.

“We're not getting out of the visual-effects business," Kuther said. "We’re diversifying the company and moving into a range of other areas, but visual-effects is a part of how we plan to build the business from here."

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