Variety reports today that MGM, the studio co-producing the upcoming Hobbit films, has begun laying off employees to cut costs and, once it emerges from bankruptcy as early as next week with $500 million in cash available once it secures a JP-Morgan Chase loan, will be seeking an additional loan of $265 – $275 million to co-finance the Hobbit films.

Layoffs, which had been anticipated, began Friday at MGM headquarters in Los Angeles and were mostly in distribution and marketing. MGM disclosed in recent bankruptcy filings that it had planned to cut the staff to about 320 from more than 400 but a spokeswoman indicated Friday that the number of cuts will be significantly smaller.

MGM, which has released only one film this year, received approval on Dec. 2 from a bankruptcy court judge of its “pre-packaged” plan of reorganization. Studio plans to emerge from Chapter 11 as early as next week with $500 million in cash available, once it secures a JP-Morgan Chase loan.

With Spyglass Entertainment toppers Roger Birnbaum and Gary Barber in charge, MGM’s expected to seek a separate loan of $265 million-$275 million for its share of the back-to-back “Hobbit” movies.

The figures should provide a very good indication of the total production budget for the two Hobbit films. Join the discussions over at our message boards – there’s just about two months to go before principal photography begins.