In a further blow to Southern California’s visual-effects industry, Sony Pictures Imageworks is moving its Los Angeles-area headquarters to Vancouver, Canada.
The unit of Sony Pictures Entertainment said Thursday it was transferring the bulk of its operations to a new facility in Vancouver, where it already has a satellite studio.
Sony is expected to keep a small staff in its Culver City facility, which employs about 270 workers.
The move will allow the company to cut costs by capitalizing on generous tax breaks that aren’t available in California.
Film companies operating in British Columbia, the province in which Vancouver is located, can recoup as much as 60% of what they spend on local labor costs. Those incentives have made Vancouver a major hub for film and TV production, as well as visual-effects work.
The decision, first reported by the Vancouver Sun, was not unexpected. The company earlier this year moved about three dozen workers to its Vancouver studio, which it opened in 2010.
“This isn’t really a shock to many as the intention of Imageworks and the studio was to try to move as much work there for the 60% rebate,” said Daniel Lay, who writes an industry blog called VFX Soldier.
The relocation is the latest sign of upheaval in Southern California’s beleaguered visual-effects industry.
California-based visual-effects companies have had an increasingly difficult time competing with companies in Canada, Britain and India that benefit from tax credits or cheaper labor to produce visual effects at a lower cost.
More than half a dozen California visual-effects houses have shut down or filed for bankruptcy in recent years amid rising global competition.
The parent company of Venice-based Digital Domain, co-founded by director James Cameron, filed for bankruptcy protection in 2012. Oscar-winning effects house Rhythm & Hues also filed for bankruptcy last year after laying off 250 employees.
Founded in 1992, Sony Pictures Imageworks is known for its visual effects and character animation on such movies as “Men in Black 3", “Oz The Great and Powerful” and “The Amazing Spider-Man 2.”
In 2007, Sony Imageworks opened an office in New Mexico to take advantage of film rebates in the state. But Sony closed that office five years later after film production slowed in that state.
A spokesman for Sony Pictures Imageworks was not immediately available for comment.