Failure to launch: How a highly touted Baton Rouge economic development deal went south
Nearly three years ago, then-Gov. Bobby Jindal and a host of other state and local officials made a major economic development announcement: India-based Stixis Technologies was opening a Baton Rouge branch, bringing with it hundreds of new jobs.
At a press conference to announce the deal, Jindal said the company would create 230 jobs by opening a software development center in the Louisiana Technology Park—and the governor added he believed that was the low estimate, Business Report details in a feature from the latest issue.
“Given how quickly their business is growing and how well they are doing, I think they’re going to create even more jobs here than what we’re announcing today,” Jindal said that optimistic day. “Many more jobs than what we’re announcing today.”
The state was offering Stixis $115 million—more than three times what the state spent on veterans services that year—in subsidies over a decade; all the India-based firm had to do was meet the job numbers it was promising. That meant Stixis had to create 265 new jobs by this year, and more than 900 by 2019.
Today, Stixis has four full-time employees.
Rayudu Dhananjaya, CEO, says he has hired a dozen or so contractors in the interim, but the ramp up fell woefully short and eventually fizzled entirely. The company never received the millions in tax credits and rebates offered by LED, as they were contingent on the hundreds of new jobs, but he insists that was never the reason he opened the Baton Rouge branch in the first place. He’s still looking for workers, he adds.
So why did Stixis fail to create all the jobs that were promised? Why did it fail to create practically any jobs?
A unanimous answer is hard to come by—the state, other tech companies, Stixis, and education leaders all point in somewhat different directions. Stixis blames the state’s lack of resources in finding talent through a workforce recruitment program. LED blames Stixis’ unreasonable demands. Higher education leaders say K-12 could do a better job training students in the basics of coding, and tech leaders simply say the pool of workers is too small.