Burbank-based effects shop reports layoffs

Burbank-based visual-effects company Stereo D, which last summer announced plans to open a Toronto office, notified the state earlier this year that in June it would be laying off more than 225 employees, including 75 temporary employees.

However, William Sherak, co-founder and president of the company, which specializes in converting films to a 3-D format, said there are still about 100 employees at the Burbank location.

“We will always remain committed to Burbank as our headquarters,” he said.

According to the filings with the state, the majority of the Stereo D layoffs affected artists, though some production supervisors and managers were also slated to be let go.

Sherak said the layoff numbers are “somewhat misleading,” but were submitted to the state to be compliant with reporting requirements. Hiring within the industry ebbs and flows based on the slate of films, which means that there are typically cyclical layoffs each summer, he said.

That, coupled with some employees moving north to the Toronto office and the movement of employees to other divisions within the firm’s parent company, Deluxe Entertainment Services Group, makes the figures not as straight-forward as they seem, he said.

Additionally, some employees left voluntarily in advance of the planned layoffs. Augustin Rios, a visual-effects artist who co-hosts a video podcast called “Superhero News on YouTube,” said via Twitter that he left the firm “a couple of months before the big layoff to try to avoid job competition.”

Tax incentives lured Stereo D to Toronto, Sherak said, but he is “extremely hopeful” and “extremely excited” about a recent expansion of the California Film and Television Tax Credit Program, which state legislators approved last summer to try to prevent the migration of production work out of state.

The California Film Commission last May awarded $82.8 million in tax credits for television productions. As of late July, applications for 254 film projects had been submitted for the second round of funding, which will provide $48.3 million in incentives for studio feature films and $6.9 million for independent projects, the Los Angeles Times reported.

Sherak said it’s too soon to know the impact of those incentives on his business. The firm is a leader in 3-D conversion, a labor-intensive process that involves artists working on every frame of a film, which some artists call “pixel pushing.”

Stereo D, which was formed in 2009, has had a hand in some of this summer’s blockbusters, including “Jurassic World,” “Ant-Man” and “Avengers: Age of Ultron,” as well as many hits from previous years, such as last summer’s “Guardians of the Galaxy.”

Sherak said because the work is so labor-intensive, the firm’s staffing tends to be dynamic and influenced by production and release schedules. If a release gets pushed back, giving artists more time, staffing may decrease. If the firm signs a new project, its rolls might grow quickly, and recently laid-off employees could have an opportunity to return as the firm staffs up, he said.

The recent formation of Deluxe Animation Studios, which Sherak also heads and which is located in the same building as Stereo D on Empire Avenue, could add 20 to 40 positions, Sherak said.

The company is set to recruit animators at the 42nd International Conference and Exhibition on Computer Graphics and Interactive Techniques, known as SIGGRAPH 2015, which will be at the Los Angeles Convention Center the week of Aug. 9, as well as the Creative Talent Network Expo at Los Angeles Marriott Burbank Airport in November.

The talent is in the Los Angeles area, “which is why we’re committed to the local area,” Sherak said.

“This is the home of Hollywood,” he said, “I don’t see that changing.”