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Rhythm & Hues, the award-winning studio considered to be a leader in the visual effects industry, has filed for Chapter 11 bankruptcy protection and laid off 200 employees.
Sadly, even the company’s Oscar-nominated work on Life of Pi couldn’t save it from layoffs. The studio said financial difficulties have been building up for a while, according to The Los Angeles Times.
Visual effects company Prime Focus was planning a deal to purchase Rhythm & Hues, but it fell through, forcing Rhythm & Hues to file for Chapter 11. However, there are still several companies interested in buying after Rhythm & Hues comes out of bankruptcy, according to The Wrap.
VFX Soldier, an industry blog, broke the news, stating that Rhythm & Hues announced to employees that payroll would be delayed and told some employees in Los Angeles not to report to work Monday morning.
Rhythm & Hues’ misfortune is yet another sign of trouble for California based visual effects companies. With studios in Canada, the UK, and India benefiting from tax credits and cheaper labor, the incentive to produce with those international companies for cheap is higher.