Amy Pascal

Amy Pascal attends Variety's 5th Annual Power of Women event presented by Lifetime at the Beverly Wilshire Four Seasons Hotel on Oct. 4, 2013 in Beverly Hills, California. 

Michael Buckner/Getty Images for Variety

Amid the fallout of the Sony hacking crisis, Amy Pascal will step down from her post as co-chairman, Sony Pictures Entertainment. 
 
The move has been widely expected ever since the studio became engulfed in one of the worst cyber attacks in corporate history and certainly the most embarrassing hit ever taken by a major Hollywood institution in the digital age.

As often is the case with ousted studio heads, Pascal will launch a major new production venture at the studio. Pascal, whose deal was up in March, will transition to the new venture in May. As part of the deal, she will be a producer on the new Ghostbusters film as well as future Amazing Spider Man outings (former Columbia Pictures president Matt Tolmach also segued to the role of Spider Man producer after he was ousted).

"I have spent almost my entire professional life at Sony Pictures and I am energized to be starting this new chapter based at the company I call home," she said in a statement. "I have always wanted to be a producer. (Sony Entertainment CEO) Michael (Lynton) and I have been talking about this transition for quite some time, and I am grateful to him for giving me the opportunity to pursue my long-held dream and for providing unparalleled support. As the slate for the next two years has come together, it felt like the right time to transition into this new role. I am so grateful to my team, some of whom I have worked with for the last 20 years and others who have joined more recently. I am leaving the studio in great hands. I am so proud of what we have all done together and I look forward to a whole lot more."

Lynton sent an email this morning to staffers announcing that Pascal is exiting.

"I am happy to say that Amy's decision is not the end of her relationship with the studio but the start of a new and exciting chapter in her extraordinary career that promises to be mutually beneficial," he wrote. "She can refocus her career on her first great love -- filmmaking-- and SPE can continue its association with an extremely talented and valued associate. Her decision has the full support of (Sony Corp. president and CEO) Kazuo Hirai."

As part of a four-year agreement, SPE will finance Pascal's venture and retain all distribution rights worldwide to the films. She will be based on the Sony Pictures lot in Culver City.

In the two-plus months since Sony first noticed that its servers had been breached by an unknown group dubbing itself Guardians of Peace, the studio watched powerlessly as huge swaths of its most sensitive documents and correspondence were leaked on the Internet. Among the most damaging were the personal information and social security numbers of some 47,000 past and present staffers as well as film budgets, profitability figures and thousands of e-mails sent to and from Pascal.
 
Pascal, who also held the title of SPE Motion Picture Group, is exiting the studio that she started at in 1988, rising to the top post that she shared with Lynton. Together, the pair oversaw all of SPE's lines of business, including film production, acquisition and distribution; TV production, acquisition and distribution; TV networks; digital content creation and distribution; operation of studio facilities; and development of new entertainment products, services and technologies.
 
As one of Hollywood's longest-serving studio heads and the industry's most prominent female executive, Pascal reigned during a time of box-office success and relative calm for the studio, which only began to endure upheavals in its upper ranks in the past year. Perhaps her biggest coup was spearheading the nearly $4 billion Spider-Man franchise, which remains the highest-grossing superhero franchise in Hollywood.
 
Under Pascal's leadership, SPE movies and television shows have enjoyed critical and commercial success. Under her leadership, Sony Pictures had 95 movies hit No. 1 at the domestic box office, more than any other studio -- a testament to her strong relationships with talent like Adam Sandler and Will Smith.

The studio also produced and distributed mammoth hits under Pascal's watch, including the James Bond films Casino Royale, Quantum of Solace and Skyfall, the latter becoming first Bond film to earn more $1 billion dollars worldwide, as well as The Da Vinci Code and Angels & Demons.
 
But in recent years, Pascal also helped shed Sony's image as a studio solely interested in box-office performance and created a destination for critically acclaimed dramas like for Zero Dark Thirty, American Hustle, Moneyball and The Social Network. At the same time, the TV operations began to flourish, with the studio boasting critically acclaimed hits like Breaking Bad and The Blacklist among its stable. In 2014, SPE films received 26 Golden Globe nominations and won seven awards, more than any other studio.

"Amy's creativity, drive, and bold choices helped define SPE as a studio where talented individuals could take chances and push boundaries in order to deliver outstanding entertainment," Lynton said. "The studio's legacy is due in large part to Amy's passion for storytelling and love of this industry. I am delighted that Amy will be continuing her association with SPE through this new venture, which capitalizes on her extraordinary talents. In recent months, SPE faced some unprecedented challenges, and I am grateful for Amy's resilience and grace during this period. Amy has been a great partner to me in heading the studio and I am looking forward to a continued close working relationship with her in her new role on the lot."

AddedHirai: "Amy has had a truly extraordinary career. In her years at Sony Pictures, Amy worked with some of the best talent in the film industry to create many of our studio's most beloved and successful films. I want to thank her for her years of dedication and I am pleased that she will continue to work closely with SPE in her new venture."

But even before the crippling hack, Pascal's grip had begun to weaken, as the studio weathered one of the worst years for any major in 2013 with a string of expensive flops including After Earth and White House Down. Even this year's Spider-Man outing began to show cracks, earning just north of $700 million worldwide for a franchise accustomed to $800-plus million hauls. She also became the target of activist Sony Corp. investor Daniel Loeb, who publicly lambasted the studio and pushed for the parent company to spin off its entertainment division. Sony Corp. brass stuck by Pascal, and Loeb eventually sold off his share in the company.

For nearly three decades, minus a two-year stint at Turner Pictures in the mid-1990s, Pascal has put her stamp on the Sony slate, shepherding such films as Hitch, Groundhog Day, Little Women, Awakenings and A League of Their Own.
 
Pascal says she got her first industry job -- working as a secretary answering phones for the legendary BBC producer Tony Garnett -- after answering an ad in The Hollywood Reporter. Early in her career, she worked under Scott Rudin at 20th Century Fox. Ironically, it was a nasty email exchange between Pascal and Rudin that was leaked by the hackers on Dec. 8 and posted on Gawker a day later that may have been the final straw for Pascal. That raw exchange, which covered everything from a Steve Jobs biopic that failed to get off the ground and was eventually jettisoned to Universal Pictures to unflattering comments about Angelina Jolie and Michael Fassbender, was followed by Dec. 10 leaked e-mails between the two that appeared to mock black movies. It all proved to be just too much candor in a town that likes to keep its machinations well behind the scenes.

This article was first published by The Hollywood Reporter.