UK animation and VFX studio Jellyfish Pictures has halted all operations and is exploring a potential sale as it struggles to keep the business going post-pandemic. 

“Like so many other companies operating across the VFX, animation and wider creative industries, we’ve been battling hard in the face of strong headwinds over the past 12 months,” reads a company statement. “The long-tail impact of COVID-19, coupled with rising costs and the fallout from the writers and actors strikes, have had a profound effect on our business.” 

As of press time, Jellyfish staffers haven’t yet said what will happen to projects in development or production, such as preschool series Stan & Gran (pictured), which is expected to premiere on Milkshake! sometime this year; and The Twits, an animated feature film based on the same-name Roald Dahl book that’s in production and set to drop on Netflix in June. 

The studio had 550 employees in 2024, according to its latest financial report, which covered the year up to March 31, 2024. Gross profits for this period were roughly US$13.6 million (£10.5 million), up from US$2.8 million (£2.2 million) in 2022. Despite having productions delayed by Hollywood’s dual strikes, Jellyfish managed to grow its revenue in 2024 and open a new office in Toronto last June. 

But shutting down operations indicates that the studio’s situation has changed dramatically of late, and now it’s on the hunt for investors or a sale.  

According to the statement, “Over recent months, we’ve been working closely with our key stakeholders to find a path forward, including exploring all options for sale and investment, with the aim of putting in place a strong financial platform upon which we can build. While we continue to engage in these discussions and explore our options, we have today taken legal steps to protect the position of the business.” 

Jellyfish’s body of work includes animation services for major studios including DreamWorks Animation (Dog Man and Spirit Untamed) and The Beano (Dennis & Gnasher: Unleashed). 

The studio joins a growing number of UK animation shops that have been hit hard by rising costs and a lower volume of service work in the market. Technicolor went into administration (the insolvency procedure for British companies that are unable to pay their debts) at the end of February when its parentco Technicolor Group collapsed, and Glasgow’s Axis Studios (LEGO: City Adventures) was put into administration last July. 

Jellyfish’s statement ends with a message of gratitude to its partners and staff. “We have so much to be proud of. We’ve worked on fantastic, ground-breaking projects with brilliant partners. And we want to thank our amazingly talented award-winning teams that day in, day out, strive to push creative boundaries with their innovative thinking and skill.”

UK animation, broadly, is facing a challenging time, but there’s some hope for studios on the way, says Kate O’Connor, executive chair of Animation UK. “It’s always concerning when a well-respected studio like Jellyfish Pictures has to pause operations. As we know, the animation sector, particularly in kids’ content, has been impacted by shifting commissioning strategies, market consolidation, and broader economic pressures leading to underinvestment. This is not just a UK issue but a global trend affecting producers and studios worldwide.

“Crucially, the UK’s fiscal environment is adapting to support animation further. The introduction of the enhanced Animation Expenditure Credit for animated feature films is a welcome step, and as a trade body, we’re working closely with government and industry partners to strengthen incentives and ensure the UK remains a world-leading hub for animation production.”

Updated on March 16 with quote from Kate O’Connor.