I think the assumption is that they were being subsidized by PJ, and I'm sure they were initially, but latterly the allegations have been that they were being subsidized unknowingly by the NZ taxpayer and this is why the shit has now hit the fan
Folks in N. America probably know the online retailer Scale Modelist. They are one of the larger online hobby shops in the USA. They have been absolutely overloaded with orders for the last several weeks, such that they are now urging caution in placing orders and noting that orders will likely be delayed by 4 days (which is a ton relative to their normal fast service). They literally stated about a week ago that recent sales have been the highest in the company's history.
So yes, as noted, COVID19 has seemingly boosted the model hobby more than hurt it.
The stated goal at WNW was always that Peter Jackson would supply money, but only to the extent that the entity was able to break even on its own.
Even if the pandemic was somehow hurting business at WNW, you would think PJ could step in and right the ship for the near term knowing the company would rebound when the world returns to normal.
Or more drastic, but temporary measures could be employed to keep the cogs oiled. At which point we wouldn't be hearing about permanent firings and the company shutting down permanently.
Without question, something fishy is going on here. Which makes the story all the more interesting.
Don't forget, PJ has made his fortune in the film industry.
That same industry is estimated to have collectively lost $7bn to date, with forecasts of the total loss being at least $20bn.
The WETA group employs 2000 people. If their average monthly salary is $4k, then each month the wage bill alone is $8 million. The NZ government has schemes to help out, but they are largely aimed at lower salaried workers. Add in rent, rates, utilities, tax, etc and the bills soon mount up.
So my considered guess is that PJ is simply herding his resources towards his main businesses. WNW & TVAL are simply disposable, at least in the short to medium term, because they don't produce any income.
Of course, I'm probably wrong.