Iwerks Cuts Staff by 35 in Reorganization

Iwerks Entertainment Inc., a Burbank supplier of special-format movie theaters and virtual-reality attractions, said it has laid off 35 of its 260 employees and eliminated plans to add 14 new positions.

The work-force reduction, announced Monday, is part of a company-wide reorganization to reduce operating costs and improve efficiency.

Since going public in one of last year’s hottest initial stock offerings, Iwerks has encountered setbacks in its ambitious plan to sell its attractions around the world and build urban-based entertainment complexes called Cinetropolis. In its fiscal year ended June 30, Iwerks lost $8.06 million on $36.6 million in revenue, and its stock has collapsed from a high of nearly $40 a share to a closing price of $6 a share on Monday.

Earlier this month, Iwerks announced the resignation of three outside directors, including former Major League Baseball Commissioner Peter Ueberroth. The company said the directors left to “devote more time to their other business interests.”

As part of its restructuring, Iwerks said it would begin a search for a chief operating officer and combine its sales and marketing efforts for its various attractions and Cinetropolis under George Wade, the company’s newly named president of business development. Other management functions have been combined, thus eliminating four positions.

Stanley B. Kinsey, Iwerks’ chairman and chief executive, said he expects the financial benefits of the reorganization to appear in the third quarter of the current fiscal year.

In the past few months, Iwerks has announced several product sales. On Monday, the company said it has signed a $2-million pact to design and build a 100-seat simulation theater at the Ocean Park theme park in Hong Kong. The theater is scheduled to open in 1996, it said.