From the letter (Thanks to David for the heads up)

Bowing down to corporate pressure, the heads of the movie studio resigned today. Major layoffs are expected imminently.

New Line will now be folded into Warner Bros.

Here is the email that was just sent out to all staffers:

“February 28, 2008

To: New Line Colleagues

From: Bob Shaye and Michael Lynne

Subject: Our Company

This afternoon, Time Warner is announcing that New Line will become a unit of Warner Bros. This is, of course, a very difficult and emotional time for all of us who have worked at New Line. While there is not much we can say that can lessen the impact of this announcement, we did want you to know about the decision before you read about it in the press.

New Line will maintain its own identity and will continue to produce, market, and distribute movies. But New Line will now do so as part of Warner Bros. and will probably be a much smaller operation than in the past. Time Warner hopes that operating New Line as a unit of Warner Bros. will allow New Line to focus on the creative side of movie-making, while reducing costs and taking advantage of Warner Bros.’ distribution systems. The company will be holding group meeting with New Line employees tomorrow in Los Angeles and New York to discuss this announcement, and is committed to letting employees know as soon as possible about how this change affects them individually.

For our part, we will be stepping down as Co-Chairmen and Co-CEOS of New Line. This was a painful decision, because we love New Line and the people who work here have been like our second families. But we will be leaving the company with enormous pride in what all of us at New Line have accomplished together. From its humble beginnings 40 years ago, our studio has created some of the most popular and successful movies of all time. Those movies are a tribute to the amazing creative energy and entrepreneurial abilities of the talented people at New Line. They are a legacy that will endure forever.

Although we are stepping out of New Line, we intend to remain actively involved in the industry in an entrepreneurial capacity, and will keep you advised of developments.

We thank all of you who have worked so hard to make New Line such a success. We are very proud of every one of you.

Bob & Michael”