London-based visual effects giant DNEG threatens employees with 25% pay cut – or a company loan

As the Canary recently reported, the US writers and actors strike has had massive knock-on effects for UK film and television workers. According to research from the media and entertainment union Bectu, three quarters of British freelancers in the industry are currently out of work.

Meanwhile, one London-based international visual effects (VFX) company – DNEG (formerly Double Negative) – is attempting to inflict 25% pay cuts on its employees. But that’s not even the worst of it.

Company loan scheme

DNEG is the largest employer in the VFX industry. It describes itself as:

one of the world’s leading visual effects and animation studios for feature film and television. We have over 20 years of industry experience and we are honoured to have won seven Academy Awards® for ‘Best VFX’ in recent years.

Some of the company’s more well-known recent works include Dune, Oppenheimer, Tenet, and Blade Runner 2049. However, despite its success and plethora of awards, DNEG is pleading poverty with its employees. On September 15, Deadline reported that the VFX company was asking 10,000 of its workers to accept a massive pay cut of 20-25% for the next seven months.

However, for those who can’t afford the financial hit, DNEG is proposing that they take an even larger immediate cut, mitigated by joining a company loan scheme. Deadline said:

One source gave an example of taking a pay cut of 50% before being immediately loaned back 40%, payable with no interest over the longer 36-month period.

Both the cut and the loan would average out to a similar loss of wages, though over very different timescales. And, of course, the loan option would saddle the worker with dept to their own employer.

Workers’ backlash

In a statement to Deadline, DNEG asserted that:

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 all employees and team members, 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.

Understandably, the company’s employees were furious. They described DNEG as “exploiting workers” and “pushing all the weight and risk onto the employee”.

Bectu held an emergency meeting about the situation on the night of 18 September. In a statement to the Canary, union head Philippa Childs said:

We recognise this is an incredibly challenging time for the UK’s film and TV industry and businesses are having to make difficult decisions. However, workers should not disproportionately bear the brunt of these and it’s critical that employers commit to being transparent and maintaining open dialogue with their workforce. We encourage DNEG to engage with us to ensure that their employees’ concerns are heard.

Many film and TV workers are already facing huge financial difficulties and this will be a very worrying time for anyone working at DNEG. Being part of a union is one of the best ways to ensure you have a collective voice at work. We encourage VFX workers in the UK to join and get active in Bectu to help bring about change.

DNEG responds

DNEG was clearly rattled by the intense backlash from both its workers and the entertainment media. On 18 September, it provided a statement to Cartoon Brew on its latest offer. Unbelievably, this still included the same loan scheme.

With the new offer in place, DNEG expects a decision from all of its employees by 29 September. The reductions would then take effect immediately on 1 October. However, even if every employee accepts, the company has still failed to rule out redundancies.

Cartoon Brew reported that employees could now:

• Take a salary reduction of 20-25% for seven months, based on a sliding scale. Higher-earning employees would take a higher percentage cut. This option also includes 30 days of paid leave over three years to compensate for the salary reduction.
• Opt for a temporary 50% salary reduction, with a three-year company loan that would put the worker at 90% of their previous salary. This option also includes 30 days paid leave.
• Reduce their hours to a three-day week for seven months, with no deduction of their hourly rate.

Ultimatum

The new addition of a possible reduced working week was previously unpopular with DNEG bosses. They claimed that it:

would not be sustainable for the crew from a financial and productivity standpoint.

The inclusion of “productivity” here exemplifies the attitude that DNEG has taken throughout this whole mess. A loss of productivity would impact the company’s bottom line – which can never be allowed to happen.

Massively cutting wages but retaining staff is not a benevolent action, and it is not motivated by a desire to protect employees’ jobs. This was amply demonstrated back in July 2023, when the company laid off dozens of its London workforce despite a 33% increase in revenue the previous year.

Instead, wage cuts mean that the company’s output remains the same whilst spending less and less. Meanwhile, the employee is left to suffer – a convenient human shield between the US strikes and DNEG’s bank balance.

Featured image via Wikimedia Commons/DNEG Animation, resized to 1910*1000, licensed under the Creative Commons Attribution-Share Alike 4.0 International license.