Sir Peter Jackson’s largest business, Wētā FX, has revealed another multimillion-dollar loss, amid a restructure in which 100 staff are expected to lose their jobs.
The Wellington-based visual effects and animation company, which has worked on films such as Jackson’s Lord of the Rings franchise, King Kong and Avatar, published its 2025 annual report with the companies register today.
It shows a $59 million loss for the year, on the back of a $82m loss in 2024.
Last year, the company said it expected to return to profitability in the medium term, but it has now again lowered those expectations.
“While the group is forecasting taxable profits from 2027-28, recent industry pressures have meant that projected profits are lower than those forecast in the prior year,” the report said.
Revenue grew to $478m for the 2025 year, compared with $430m last year.
A majority of its income came from New Zealand clients, with $411m in revenue sourced locally, compared with $7.3m from America, $25m from Australia and $34m from Canada.
Government tax incentives accounted for nearly $2m in revenue, with $1.6m from research and development tax incentives (RDTI) and $383,000 of film incentive income.
The company is also planning to restart research and development (R&D) work, to capitalise on the Government’s R&D tax incentive scheme, which offers a tax credit at the rate of 15%.
Wētā FX stopped its R&D programme in 2022. The report states “the group’s R&D programme restarted in the 2024-25 financial year, including activities that are eligible under the RDTI scheme”.
Following the report being published, a Wētā FX spokeswoman said the company “remains debt free and financially stable.”
“This reporting loss was necessary to comply with New Zealand and global accounting standards and was expected due to ongoing and forecasted amortisation from previous software and technology investments”, the spokeswoman said in a statement.
“Wētā FX is working through its change process. As we always have, we need to prudently ensure our crew levels reflect our pipeline of work, which we expect will be lower in 2026 than the historic highs of the last few years. The current changes reflect our approach to carefully manage these dynamics against a challenging industry backdrop.”
Earlier this month, the company confirmed it is undergoing a restructure which would see about 100 jobs cut, blaming strike action, the ongoing impact of the Covid-19 pandemic and changes in audience habits.
The company currently employs about 2200 crew globally, most of whom are contracted artists and won’t be impacted by the changes.
“A number of macro factors have led to the proposed changes, including current challenges facing the global entertainment industry,” Wētā FX said an earlier statement.
“In addition to unexpected delays in projects being green-lit due to financial considerations, the industry continues to feel the long-tail impact of the pandemic, industry strikes and changes in audience content consumption habits.
“As a leader in visual effects, which happens at the end of a film’s creation in the post-production process, Wētā FX is navigating the after-effects of these disruptions to ensure ongoing sustainability.”
The Herald has also seen an internal memo from CEO Daniel Seah sent to staff yesterday titled “update on organisational changes”, which further outlines plans for the restructure.
The memo says the restructure will impact staff working in department production, marketing, finance, facilities, T&C, T&R, IT and central production.
Staff were to gather for a “town hall” in mid-August where Seah said he would answer questions and speak to employees directly.
The company has refused to provide updates on the status of its restructure, despite requests from the Herald for more information.
A current Wētā FX employee who contacted the Herald said at the time staff were on edge about the restructure.
“Many of us are anxious about the scale of this move and what it means for the future of our careers, our families and the local creative industry,” the employee said.
“This would affect staff, both permanent and contracted, across various departments.”
Formerly known as Weta Digital, the company was founded by Jackson, Sir Richard Taylor and Jamie Selkirk in 1993 to produce the visual effects for the film Heavenly Creatures.
It has worked on the special effects for films including the Lord of the Rings trilogy, King Kong, James Cameron’s Avatar, Rise of the Planet of the Apes and the Robbie Williams biopic Better Man.
Jackson sold the company’s tech division for a reported $2.3 billion to US-based game tech company Unity in 2021.
In late 2023, Wētā FX said it and Unity “mutually agreed” to terminate Unity’s service agreement with Wētā FX, causing 265 redundancies.
Following that, Jackson regained control of the company.
The company is now 60% owned by Jackson and his partner, Dame Fran Walsh. An entity associated with foreign shareholder Sean Parker owns 25%. Long-time Wētā effects supervisor Joe Letteri owns 8% and the remaining 6% is held by an entity connected to former Wētā chief executive Prem Akkaraju.
Wētā FX is a separate company to Wētā Workshop, which focuses on the physical effects for films, such as props, costumes, makeup and prosthetics.
Wētā Workshop, also based in Wellington’s Miramar, is owned by Taylor and wife Tania Rodger.
Headquartered in Wellington, the business also has “creative hubs” in Vancouver and Melbourne.
Much of Wētā’s business is supported by Government incentives that allow film producers to claim back 20% of a contract’s value for work undertaken in New Zealand.
While this does not go directly to Wētā and is not broken down in the accounts, Official Information Act requests in 2018 showed subsidies for Wētā Digital screen work amounted to $40m annually.
Ethan Manera is a New Zealand Herald journalist based in Wellington. He joined NZME in 2023 as a broadcast journalist with Newstalk ZB and is interested in local issues, politics, and property in the capital. He can be emailed at ethan.manera@nzme.co.nz.