Quixote Studios has started to wind down operations in the Atlanta area, redeploying equipment and other assets to Los Angeles and New York. Separately, it’s also exiting most of its leased sound stage facilities in L.A.

The phased wind-down, which will eliminate about 70 jobs between Atlanta and LA, Deadline hears, will take place over the coming quarters to minimize disruption for Quixote clients. Parent Hudson Pacific t said Tuesday it is looking to realize up to $27 million in annual cost savings.

The real estate investment trust acquired Quixote in 2022 for $360 million as production rebounded post-Covid with Atlanta one of the fastest growing hubs due to generous incentives. The shift announced today is another sign of disruption in the landscape.

Quixote’s fleet, lighting and grip, production supplies and communications rental services will continue in New York and Los Angeles. And Hudson Pacific said Sunset Studios, its separately owned (not leased) studio portfolio, “remains unaffected and continues to demonstrate resilient demand fundamentals” with flagship Hollywood stages 96% leased and the newly delivered Manhattan stages 100% leased. “Best-in-class, purpose-built studio real estate in prime locations continues to attract strong tenant interest even amid more moderate production levels,” the firm said.

Quixote will wind down its leases on studio locations in LA except for Griffith Park.

“We have been working with Quixote’s leadership to further streamline that business in alignment with our commitment to capital discipline and portfolio quality,” said Hudson Pacific President Mark Lammas in a statement.

“Quixote is taking steps to move away from leased sound stages and markets characterized by structural cost or demand disadvantages, which will allow Hudson Pacific to focus financial and operational resources on our office portfolio and higher performing segments of our studio business.”

Hudson Pacific, which is publicly traded, anticipates the cost savings will begin to materialize in the second half of the year. It will likely update Wall Street on its Q2 earnings call May 7.