DNEG, DNEG 360, and multiple redundancies: a tale of two industries

Two stories from visual effects and animation powerhouse DNEG, 24 hours apart, reveal the very different fortunes of two different parts of its business.

So, two stories with two very different outcomes.

The first, which you can read here, was all about the launch of DNEG 360. It's an impressive story: DNEG is extending its three-year old partnership with Dimension Studio to add a range of new virtual production services and debuting two of the world's largest LED volumes. Based in London and Rome, these behemoth spaces are very much aimed at the high-end, will be operated day-to-day by Dimension, and showcase that there is still very much money to be made from virtual production even as the technology percolates down to mid-tier productions and beyond.

The second story was far less cheery. Deadline broke the story that 'hundreds more layoffs' were coming at the firm. Admittedly, with a global workforce of some 10,000 employees, hundreds does not perhaps have the impact it would have at a smaller company. But even so, the 5% figure that Deadline mooted would be 500 people and the site reckons that the redundancies are likely to be concentrated within R&D teams and in the UK and Canada.

This is not the first time that DNEG has hit financial buffers recently. It tried to go public but failed in 2022, made a (thankfully smaller round) of redundancies last year, and floated a pay offer that Deadline rather kindly simply describes as 'controversial' soon after. This asked employees to either take a 25% pay cut for seven months or join a scheme where they took a larger cut (50%) but DNEG lent them 40% of the money back to tide them over. This then had to be paid back over a there year period.

It did not go down well.

At the time, DNEG cited the Hollywood strikes and the consequent global slow down as reasons for taking the action. This time there is no official word at all, only rumours of a consultation process taking place.

So, what's going on? The fact is that the strikes are still casting a long shadow and the VFX industry was up shit creek without a paddle even before then. The industry has lost several key companies that would once have been thought to be untouchable, Rhythm & Hues amongst them, and is increasingly characterised by long hours, low pay, little on the job recognition, and now increasing job insecurity. Effectively, it's on the verge of becoming a gig-economy job, making it little wonder that attempts to unionise are gaining traction amongst beleaguered staff worldwide.

The fact that the VFX house behind such hugely impactful movies as Dune and Oppenheimer is in financial difficult speaks volumes about the fractured state of visual effects. But the fact that it feels it can invest what looks like a significant amount in an expansion of its virtual production business shows that there is still money to be made in the industry in the right places.

It's just exactly where those potential profits seem to be that is changing. Referring to virtual production and VFX as two different industries might be over-egging it a bit, but in the way they are being treated by companies - and looked at by investors - they might as well be. And, as ever, it is the workers that tend to sink below the surface in the middle as capital sloshes from one side of the bucket to the other.