Happy Feet Two flop leads to 600 layoffs: report

As a result of the poor box-office performance of Happy Feet Two, 600 of the 700 employees at the digital production studio behind the animated movie reportedly have received their walking papers.

Employees at Dr. D Studios, which is based in Sydney, Australia, 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, a sequel to 2006's Academy Award-winning Happy Feet -- which grossed $384.3 million off a budget of $100 million -- had amassed only an estimated $30.3 million worldwide as of Thursday.

There may be a silver lining for some of the employees, who reportedly have 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 in early 2012. KMM was founded in 1973 by Happy Feet director George Miller and producer Byron Kennedy.

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

Released on November 18, Happy Feet Two has not found much success. It opened in 3,606 theaters and came in second at the box office during its debut weekend, grossing $21.2 million. Its estimated budget was $140 million.

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 further traction.

Dr. D Studios, which specializes in digital feature film production and high-end special effects, reportedly had 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.

According to DrDStudios.com, Fury Road is in pre-production, although the site also includes an out-of-date notice that Happy Feet Two is in production. There are no job openings listed on the site.