One of Hollywood's most well-known studios is experiencing some economic problems and has decided to let go more than 500 staff and close down one of its animation studios.

On Thursday DreamWorks Animation announced it would be restructuring the company to offset losses in the last recent years, according to the San Francisco Gate. The company has decided to cut 500 jobs from all its locations and divisions, losing around 20 percent of its workforce.

Based in Glendale, California, DreamWorks Animation hopes to save around $30 million in pretax costs in 2015 with this quantity rising to savings of $60 million by 2017. However, this comes at a cost.

The company has decided to cut back on the films it releases every year to only two, one sequel and one original movie.

"The No. 1 priority for DreamWorks Animation's core film business is to deliver consistent creative and financial success," said DreamWorks Animation CEO Jeffrey Katzenberg. "I am confident that this strategic plan will deliver great films, better box office results and growing profitability across our complementary businesses."

Aside from losing 500 employees, DreamWorks Animations has also decided to close its PDI studio in Redwood City, reports Variety. The studio is known for the "Shrek" films, "Madagascar: Escape 2 Africa," "Penguins of Madagascar," and "Mr. Peabody & Sherman."

Acquired in 2000, Pacific Data Images has also helped with films like the "How to Train Your Dragon" series.

Among those leaving the company are Dawn Taubin, head of marketing, and Mark Zoradi, chief operating officer. Lew Coleman will retire as vice chairman.

"My time and my focus needs to be on making blockbuster films," Katzenberg said in a phone conference. "We have the people to do it. That's where my energy is going to be focused.

"Feature animation is the core of our company. Getting our feature film business back on track is our number one priority."

The company's plan for the next three years focuses on six movies: "Kung Fu Panda 3″ (March 18, 2016), "Trolls" (Nov. 4, 2016), "Boss Baby" (Jan. 13, 2017), "The Croods 2″ (Dec. 22, 2017), "Larrikins" (Feb. 16, 2018) and "How to Train Your Dragon 3" (June 29, 2018).

The Hollywood Reporter said the company's stock dropped on Friday following the reorganization announcement. Friday morning the stock plunged to between $18.50 and $19.