The visual effects world is bracing for a seismic shift as Technicolor Group, the parent company of leading VFX studios MPC, The Mill, Mikros Animation, and Technicolor Games, faces imminent shutdown due to “severe financial challenges.”

On Friday, Technicolor issued a WARN notice to U.S. employees, warning that operations could cease as early as February 25, 2025. The closure would affect thousands of visual effects workers across multiple countries, including the U.S., UK, Canada, and India. Meanwhile, the UK arm of Technicolor Creative Studios has already entered administration, a process that could lead to liquidation.

A source told Variety that desperate efforts are underway to strike a last-minute deal—whether through an acquisition of the full company or sales of individual brands—but time is running out. “People are rushing to see if they can do a deal,” one insider said.

The End of an Iconic VFX Giant?

Technicolor’s fall would mark the end of a century-old powerhouse in filmmaking technology. Founded in 1916, Technicolor pioneered color film and later became a dominant force in VFX and post-production. MPC (Moving Picture Company), which opened in London in 1970, became one of the industry’s most respected visual effects houses, working on major franchises from Harry Potter to The Lion King.

Unfinished Blockbusters at Risk

If Technicolor collapses, several high-profile films could be left scrambling for new VFX vendors. MPC’s upcoming projects include:

• Disney’s Snow White

• Disney’s Lilo & Stitch

• Paramount’s Mission Impossible – The Final Reckoning

Mikros Animation—another Technicolor brand—has also been working on Paramount and Nickelodeon’s Teenage Mutant Ninja Turtles 2. It’s unclear whether these projects will be completed under the current studios or shifted to other VFX vendors, causing potential delays and increased costs for the studios involved.

A Long Struggle Comes to an End

Technicolor’s financial troubles didn’t happen overnight. The company has been in a years-long downward spiral, exacerbated by:

•The pandemic, which shut down film production and crushed revenues

•The Hollywood strikes, which further stalled work in 2023

• A failed restructuring effort, even after hiring former Europcar CEO Caroline Parot in 2023

•Bankruptcy filings, including Chapter 15 bankruptcy protection in 2020

• A botched 2021 sale of Technicolor Post to Streamland Media for $36.5M, which failed to stabilize the company

In 2022, Technicolor attempted a rebrand, relaunching MPC, The Mill, Mikros, and Technicolor Games under the new name Technicolor Creative Studios, but the financial strain never eased.

What Happens Next?

The industry is now asking who will fill the void left by Technicolor’s potential demise. Will another VFX giant acquire MPC and The Mill, or will smaller studios absorb their workload? Will major studios like Disney and Paramount shift more work to independent VFX houses or virtual production platforms?

One thing is clear: this is a turning point for the VFX industry. As costs rise and studios demand faster turnarounds, the future of visual effects may no longer belong to legacy companies like Technicolor—but to leaner, more tech-driven operations.