Upcoming Layoffs at DNEG Affecting VFX Teams Behind Dune and Oppenheimer

DNEG, the visual effects powerhouse behind recent blockbusters like Dune: Part Two and Oppenheimer, is facing a new round of layoffs, affecting around 5% of its global workforce of approximately 10,000 employees. The company, which has not yet commented publicly, has initiated a consultation process in both the UK and Canada.

This workforce reduction is primarily targeting the R&D departments and comes as a response to ongoing market challenges. Despite the end of the Hollywood strikes and a previous pay offer aimed at staff retention, market conditions have failed to improve significantly.

In the UK, around 100 job losses are anticipated, and the trade union Bectu is actively supporting its members during this turbulent period. Philippa Childs, head of Bectu, expressed deep concern for the workers, emphasizing the compounded difficulties faced by UK film and TV personnel over the past year.

Concurrently, DNEG's Canadian employees recently unionized under an IATSE branch, which is assisting affected workers through the redundancy process.

Amid these cuts, DNEG has also announced the launch of a new venture, DNEG 360, in partnership with Dimension Studio. This initiative aims to expand their virtual production capabilities, with new facilities planned for London and Rome.

The layoffs at DNEG are not isolated incidents but part of a broader pattern of redundancies the company has enacted over the past year as the global economic downturn continues to impact the VFX industry. Just last year, DNEG implemented about 70 layoffs from its central London location and introduced a controversial pay adjustment plan during the Hollywood strikes to mitigate further job cuts.

Despite these challenges, DNEG remains a major player in the VFX industry, with offices worldwide and a portfolio of Oscar-winning projects such as Inception and Tenet. The company's revenues soared by 33% to $409 million in the fiscal year ending March 2022, with adjusted EBITDA exceeding $100 million. However, the economic landscape has shifted significantly since then, and the full impact on DNEG's operations and its forthcoming financial results for 2023 remains to be seen.