VFX facility The Mill is set to close its TV department.
The Soho post firm said it “had not been immune to the volatile trends present in film and television production”.
It is now in consultation with staff about the plans, with an estimated 25 employees likely to be affected by the move.
The department is expected to close in April.
When asked why the firm was looking to shut the division, The Mill chief executive Robin Shenfield said: “It comes down to the volume of work - it’s not any more complicated than that.”
Shenfield said the TV market became “particularly volatile” around 18 months ago.
“We have been Saturday night VFX drama specialists for the last nine years, but there has been less demand from that sector.
“I think the market will return, but this interregnum forced us to look at whether it is part of the market we want to operate in for the long term. For a prolonged period we have found the market challenging.”
The Mill’s recent TV credits include Sinbad, Doctor Who, and Merlin (pictured).
The likely closure of The Mill’s TV unit follows a turbulent few months for the VFX industry, with senior figures from the sector raising concerns about the pipeline of TV and film VFX work.