Disney to shut down ‘Ice Age’ studio Blue Sky, the latest brand to fall

Walt Disney Co. has decided to shutter Blue Sky Studios, the computer animation company behind the “Ice Age� films, roughly two years after acquiring it as part of the larger purchase of 21st Century Fox assets.

The decision will result in about 450 layoffs after the closure takes effect in April. Besides the five “Ice Age� features, Blue Sky was also known for such films as “Rio� and “Ferdinand,� which was nominated for the 2018 Oscar for best animated feature.

Blue Sky’s demise, first reported by Deadline, comes as the COVID-19 pandemic continues to buffet Disney’s film business by keeping most U.S. theaters closed. Disney has delayed its big films or, in some cases, sent them straight to streaming on Disney+. Disney’s business has been challenged by restrictions on theme parks, retail stores and cruise lines. The Disneyland theme park in Anaheim has been closed throughout the public health crisis.

At its peak, Blue Sky was a formidable competitor against dominant animation brands DreamWorks Animation, Disney and Pixar. But when Disney bought 21st Century Fox for $71 billion in 2019, the company absorbed Blue Sky into its studio division that was already home to two successful animation brands — Walt Disney Animation and Pixar Animation. Amid the economic challenges in the industry, sustaining three animation studios became untenable.

“Given the current economic realities, after much consideration and evaluation, we have made the difficult decision to close filmmaking operations at Blue Sky Studios,� Walt Disney Studios said Tuesday in an emailed statement.

Disney has laid off tens of thousands of workers during the pandemic. The Burbank-based giant disclosed in a filing last year that it would cut 32,000 jobs, including a significant portion of its theme park staff. Disney’s studio division was also hit by cuts. Disney posted a net loss of $2.8 billion for the 2020 fiscal year.

Since buying Fox assets, Disney has cut, rebranded or pared down some of the brands that were part of Rupert Murdoch’s entertainment empire. 20th Century Fox and Fox Searchlight were rebranded as 20th Century Studios and Searchlight Pictures, respectively. A year ago, Disney sold mobile video game unit FoxNext Games Los Angeles to L.A.-based game studio Scopely.

The company has also cut its own brands, recently closing down its influential children’s radio networks, Radio Disney and Radio Disney Country, and laid off 36 full- and part-time employees.

Blue Sky, based in Greenwich, Conn., was founded in 1987 by Alison Brown, David Brown, Michael Ferraro, Carl Ludwig, Eugene Troubetzkoy and Chris Wedge after their previous employer, MAGI, which did animation work on Disney’s “Tron,� closed shop. As a visual effects house, Blue Sky worked on films including “Joe’s Apartment� (1996), “A Simple Wish� (1997), “Alien Resurrection� (1997) and “Fight Club� (1999), according to its website.

After being purchased by 20th Century Fox in 1999, the company established itself as a player in the feature animation space with the release of “Ice Age,� featuring the voices of Ray Romano, John Leguizamo and Denis Leary as prehistoric animals. The 2002 comedy grossed $383 million at the global box office, including $176 million in the U.S. and Canada.