Categorized | Canadian Politics

Digital media company lays off workers after getting provincial funding

Posted on 07 February 2018 by admin

Legend 3D promised to create 270 new jobs through funding from the Ontario government, but its Toronto office soon be down to 100 employees.

A digital media company receiving money from the provincial government’s jobs fund is shedding most of its Toronto workforce, saying it is “realigning” its plans here.

When the Liberal government announced $3.1 million for Legend 3D last summer, it said the L.A.-based firm would “nearly double its current workforce, creating 271 new jobs and retaining 280 positions in Toronto.”

However, after a number of layoffs in recent months, the Toronto office will soon dwindle to about 100 employees — although the company says more hires will happen in the future as it takes on new projects.

But the Ontario government says its officials are now “working with Legend 3D to confirm that they are following the terms of our contract.”

The money from the Jobs and Prosperity Fund is to be spread out over a number of years, and Legend has so far received about $180,000.

“Any money that flows to one of our partner companies is contingent on the company meeting clear investment and job targets,” said Daniel Bitonti, spokesperson for Steven Del Duca, Ontario’s newly appointed minister of Economic Development and Growth.

All deals, Bitonti added, “contain ‘clawback’ provisions tied to overall dollars invested, new project jobs created, and the overall employment footprint maintained. The bottom line is that if any company were to drop below the minimum footprint, they would have to refund taxpayer dollars.”

Legend 3D says it has fulfilled its employment targets for 2017, and that it was clear its jobs were mainly contract positions, given the nature of the industry where workers are hired based on projects. Steffler said it is on-target for the jobs promises it made to the government.

The company says it reduced the number of employees after wrapping up several projects, but more jobs will come along.

Chief administrative officer Barry Stagg told the Star that, with new facilities in India and China to handle the 3D work, “we are going to be realigning Toronto to become more focused on visual effects” over its multi-year plan for the government money, which will also be used for staff training and equipment upgrades.

“The government knows that this industry does have project hires,” added chief financial officer Mark Steffler. “Jobs go up and down depending on projects.”

But for workers, the precarious employment has left them confused, given the government funding was announced with such fanfare but followed by the gutting of several departments.

“We are all left wondering — where did the Ontario government money go?” said one current employee, who asked not to be named. “None of our facilities saw upgrades, we never saw the 300 jobs that were supposed to be created.

“Instead, two foreign branches were set up.”

Former production coordinator Amber Couturier, who left her full-time job at Legend about six months ago, said she did not like the working conditions and was “livid” about the government funding.

“I know other people who heard about it and they too were (upset), because we knew that they didn’t have the projects, they kept having people at three-hour shifts a day because they didn’t have the work.”

Ontario’s auditor general has twice raised questions about the billion-plus dollars the government has handed out since 2004.

New Democrat MPP Catherine Fife, her party’s economic development critic, said the government does a “very poor job monitoring the return on investment on these grants, and even doing basic due diligence to ensure the government funding will retain jobs or even grow the business in question.”

She said funding should go for full-time work, not contracts.

“This government is in the business of supporting precarious work,” Fife added. “They should know that the citizens of this province expect more, and have every right to do so.”

Legend 3D has worked on such blockbuster hits as the new Ghostbusters, Fantastic Beasts and Where to Find Them and Doctor Strange.

It set up shop in Toronto in 2015, converting films from 2D to 3D, as well as working on visual effects for television and virtual reality projects.

The Liberals also ran into trouble in 2016, after Arc Productions shut down, throwing 500 people out of work, just seven years after receiving $23 million in public funds. In that case, the government said the company had met all contractual obligations and the money was not repaid.

When the government announced the funds for Legend, the company also pledged to invest $27 million in the Toronto office.

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