After laying off 7.5% of its London HQ workforce in July, DNEG is now taking drastic steps to cut costs amidst the ongoing WGA and SAG-AFTRA strikes. The prolific VFX firm has now asked its staff t accept pay cuts up to 25% or join a loan payback program. Insiders close to Deadline believe employees who don’t agree to some form of pay cut will be terminated.
DNEG’s over 10,000 employees across studios in London, LA, Vancouver, Mumbai, Chennai, Montreal, Bangalore, Toronto and Sydney will now have to accept cuts of between 20% and 25% for seven months. For those that cannot afford such high cuts, their second option is to take a larger cut in the short term, a portion of which will then be loaned back to the employee, which must be paid back to the company over three years. For example, a pay cut of 50% will result in an immediate 40% loan to the employee, payable with no interest over the longer 36-month period.
The surprising demand will “help us protect the largest possible number of jobs,” a spokesperson told AWN. “Our intention in providing these options is to try to avoid adding hundreds more artists, producers and support staff to the sadly large and growing numbers that are currently out of work in our industry. Our industry will rebound, and when it does, we intend to be ready with the talent, experience, and tenure that our clients have come to expect from DNEG.”
The spokesperson continued, “As we continue to proactively review this difficult situation, we have been consulting closely with our employees and teams across the globe. We have provided multiple options for their consideration, including reduced hours for reduced pay, compensation for lost wages in the form of additional paid leave, as well as an option to spread the effect of the salary reduction over a longer period of time, to keep as much cash as possible in people’s pockets over the next few months. We continue to work with our teams to determine the best course of action for all, with the overall aim of avoiding the need to significantly reduce our global workforce, so that we’re ready once productions resume.”
Unions and workers don’t seem so pleased with the firm’s efforts to “maintain jobs,” with many reacting angrily to not only the cuts, but the alleged time frame of 11 days they have been given to decide. The Animation and VFX branch of the UK’s broadcasting union Bectu will host an emergency Zoom meeting “for those affected by DNEGs enforced pay cuts and loan scheme to take action,” and urge members to remember it is “illegal to impose a pay cut without consent.”
A DNEG spokesman acknowledged the “concern and uncertainty among our valued teams and community,” with promises to “address the changes directly and honestly.”
“All of us at DNEG are keenly aware of the tremendous challenges facing the feature film and television industries at the moment, and the visual effects and animation studios that support them have been forced to confront those challenges,” added the statement.
It continued, “DNEG is not immune to the impact of the current industry disruption, and we are not alone. These challenges are impacting all filmmaking departments, and our global clients are facing suspension or postponements of projects that represent meaningful revenue to all companies and professionals working in this industry. As a result, we are continuously and proactively reviewing all areas of our business to ensure that we can continue to deliver the highest quality work while protecting as many of our employees’ positions as possible. In order to do that, we’ve asked employees and team members earning above certain salary thresholds, including the most senior executives and creative leaders, to assume short-term pay cuts that will enable us to maintain the maximum number of jobs through this period.”
“This is not a decision we have made lightly,” the statement went on to say. “Our proposal is designed to allow us to keep more employees on payroll than we could otherwise support. After close consultation with our teams on how we can best make the proposal work, we have provided options that include both reduced hours for reduced pay, and compensation for lost wages in the form of additional paid leave, as well as an option to spread the effect of the salary reduction over a longer period of time. We’re proposing solutions that are designed to sustain jobs and keep as much money as possible in our employees’ pockets during this difficult period, while positioning the company to meet the current economic challenges, and be ready to get straight back to work on new projects for our clients once this disruption passes.”