Province cuts Neo Financial job-creation funding

‘They have created fewer positions and trained fewer people than originally projected’: economic development minister

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The Manitoba government has cut job-creation funding promised to Neo Financial, saying expectations haven’t met reality.

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Hey there, time traveller!
This article was published 26/07/2024 (446 days ago), so information in it may no longer be current.

The Manitoba government has cut job-creation funding promised to Neo Financial, saying expectations haven’t met reality.

In April, the Free Press reported on layoffs and allegations of a toxic workplace at the virtual bank, which had reached a $1-billion valuation and was heralded a “unicorn” company in 2022.

It was a burgeoning Calgary-based business when Manitoba’s then-Progressive Conservative government announced $1.6 million for its establishment of a Winnipeg office. The funding was tied to Neo’s creation of 300 jobs and training of 32 already-hired staff.

JESSICA LEE / FREE PRESS FILES
                                Neo Financial’s Winnipeg offices in 2021. The Calgary-based company achieved a $1-billion evaluation in 2022

JESSICA LEE / FREE PRESS FILES

Neo Financial’s Winnipeg offices in 2021. The Calgary-based company achieved a $1-billion evaluation in 2022

“They have created fewer positions and trained fewer people than originally projected,” said a statement Friday attributed to Economic Development Minister Jamie Moses.

The statement didn’t detail the gap in expectations. However, the provincial government has lessened its funding to $1,262,548 — a near $340,000 drop.

The money has been dispersed and no further funding commitment has been made to Neo, a government spokesperson wrote in an email.

The funding project had been slated to continue until March 2025.

“We are also looking into better oversight processes to address the rare instances where a company is not meeting their commitment to worker retention,” Moses said in the statement.

Earlier this year, the now-Opposition PCs referred to a November 2021 news release when asked for specifics about the grant. The investment came through the province’s industry expansion program.

Neo Financial continues to update government on the positions it’s being funded for, a provincial spokesperson said. The company must keep its new positions for 2,080 hours or one full-time year.

Neo Financial didn’t respond to Free Press questions by print deadline Friday.

The bank positions itself as challenging bricks-and-mortar competition. It was co-founded by two creators of SkiptheDishes, a grown-in-Manitoba business success story.

Since April, the Free Press has heard from five former staff — in Winnipeg and Calgary — who lost or quit their jobs.

At least one former employee who came to Manitoba for Neo has left Canada, citing losing their job as the reason.

The worker spoke on the condition of anonymity. They shared their letter of termination, which mentioned their Neo software development team’s dissolution.

Another person, based in Calgary, showed they were let go within 16 months of being brought to Canada by Neo via a temporary work permit. Their permit expires in 2025.

Both employees were labelled “terminated without cause” within the past nine months.

“I’m not surprised,” Craig Tataryn, a former principal software developer at Neo Financial, said of the provincial funding cut. “I know what their churn is … they’re shedding people.”

Tataryn is one of two former employees to file Manitoba Employment Standards claims against Neo Financial in July 2023. He and a colleague are seeking money for alleged unpaid overtime and vacation pay.

Employment Standards has made a decision, Tataryn said, but he’s trying to cement a deal with Neo outside government; the decision is a last resort.

Over the past month, roughly eight people laid-off by Neo Financial have contacted him about making Employment Standards claims, Tataryn said.

“We shouldn’t be funding a company that’s firing people,” Tataryn asserted, adding he’s found Employment Standards to be “a good way to hold companies like this accountable” — if you have the time.

In the past, Neo Financial staff have reportedly been instructed to write positive reviews of the company on Glassdoor, a website used for job searching. One former employee shared a memo from a higher-up saying they’d “been visited by the Glassdoor Review Fairy;” other workers relayed similar experiences.

The company advertises more than one million clients and upwards of 750 employees. By mid-March this year, Neo had created 235.5 net new Manitoba positions, data from a freedom of information request stated.

Staffing levels have “remained stable,” Amanda Broos, Neo Financial vice-president, people, wrote in an email in April.

“While there have been individual cases of separation due to performance or strategic business restructuring, these have not been indicative of a broader trend or large-scale layoffs within our organization.”

She said Neo Financial was “committed to growth in the Manitoba market and technology ecosystem.”

The company sponsors Tech Thursdays, a weekly meet-up for industry players. It became the Canadian Elite Basketball League’s first financial partner, the CEBL announced in May.

Neo Financial has more than 12,000 merchant partners where users can earn cash back, a January blog post by the company reads.

gabrielle.piche@winnipegfreepress.com

Gabrielle Piché

Gabrielle Piché
Reporter

Gabrielle Piché reports on business for the Free Press. She interned at the Free Press and worked for its sister outlet, Canstar Community News, before entering the business beat in 2021. Read more about Gabrielle.

Every piece of reporting Gabrielle produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.

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