Where Did All the Jobs Go?

The Real Cost of Hollywood’s Studio Mergers and Production Freeze

By Pike Baker

When Hollywood shut down in the spring of 2020, the scale of its collapse was unprecedented. That April, the U.S. Bureau of Labor Statistics recorded a loss of more than 217,000 jobs in the motion picture and sound recording sector — the largest single-month employment drop ever recorded in the industry (U.S. Bureau of Labor Statistics, 2020).

Yet even as the pandemic’s restrictions lifted, the promised recovery never truly arrived. Instead, between 2022 and 2025, the global film, television, animation, and visual effects sectors experienced a prolonged and more insidious decline — driven by mergers, automation, and widespread studio consolidation. The result has been one of the most sustained contractions of creative labor in modern Hollywood history.

The Numbers Behind the Decline

The 2025 Otis College Report on the Creative Economy found that California’s film, television, and sound sector remains approximately 25 percent smaller than in 2022, despite partial rebounds following the twin WGA and SAG-AFTRA strikes of 2023 (Otis College, 2025). The report also highlights the decline in total creative industry employment statewide, with thousands of positions lost in production, post-production, and sound.

FilmLA’s 2023 Scripted Content Study paints a similar picture of contraction. Greater Los Angeles lost nearly 19.7 percent of its share of first-run scripted television projects between 2022 and 2023, marking one of the sharpest drops since the region began tracking data (FilmLA, 2024). Because Los Angeles historically accounts for about one-quarter of all U.S. production, that downturn translated into thousands of lost crew jobs, shuttered rental facilities, and unused stages across Burbank and the San Fernando Valley.

By mid-2025, those losses showed no signs of slowing. FilmLA’s Q2 report logged 5,394 on-location shoot days, down 6.2 percent from the previous year and more than 30 percent below the five-year average (Los Angeles Times, 2025). The slowdown has left many freelance workers idle for months at a time, eroding savings and forcing career changes.

Technicolor’s Collapse: The End of an Era

No single event illustrates this fragility better than the collapse of Technicolor Group in early 2025. Once synonymous with Hollywood’s color revolution and known globally for its work on The Wizard of Oz, The Lion King, and Mission: Impossible, the 111-year-old post-production empire fell apart virtually overnight.

A Deadline investigation reported that 4,500 employees were laid off within 24 hours, and as many as 10,000 globally were impacted as its subsidiaries — including MPC, The Mill, Mikros Animation, and Technicolor Games — shut down operations (Deadline, 2025). In the U.K., the company’s workforce dropped from 1,170 to 446 during 2024 — a 62 percent reduction — while in India, roughly 2,000 staffers went unpaid when payroll froze.

The implosion sent shockwaves through the visual effects community. Variety described the event as “sickening,” quoting one veteran who said, “Thousands of artists were left without jobs overnight, and an entire chapter in VFX history came to an abrupt end” (Variety, 2025).

Mergers and Studio Consolidation

Across the broader entertainment landscape, the picture is equally dire. Disney’s closure of Blue Sky Studios in 2021 erased nearly 450 animation jobs. Warner Bros. Discovery’s merger with Cartoon Network Studios consolidated teams and eliminated entire departments. Paramount Global shuttered its television studio in 2024, while NBCUniversal, Lionsgate, and Netflix all enacted company-wide layoffs over the following year (Deadline, 2025).

Taken together, these cuts represent the dismantling of much of Hollywood’s middle class — the editors, compositors, and animators who once formed the backbone of studio and network production. As the major corporations reduce costs and merge departments, fewer projects are being made, and even fewer workers are being hired to make them.

The Uncounted Workforce

The Bureau of Labor Statistics data fails to capture the full scale of this downturn because most Hollywood workers are independent contractors, hired on a per-project basis. A grip or compositor who works one job a year still counts as “employed,” even if they only worked for two weeks.

Industry observers say the result is a massive undercount of displaced professionals. Analyst Jeremy Vanneman estimates that “the layoff numbers are far worse than they seem,” explaining that studios report only cuts to full-time staff while ignoring the disappearance of freelance jobs that make up the majority of the workforce (Vanneman, 2024). Many who once earned steady middle-income wages now make a fraction of that, relying on side work or leaving the business entirely.

Unions Sound the Alarm

The depth of the crisis has not gone unnoticed by the unions. In early 2024, the Art Directors Guild (IATSE Local 800) suspended its Production Design Initiative program, citing widespread unemployment among members. In an internal memo — later obtained by The Wrap — the Guild stated that “more than 75% of our members are unemployed and many have not been working for 18 months or more” (The Wrap, 2024).

However, the ADG later clarified that this number was part of a draft communication and had not been independently verified. Even so, the figure echoes the reality reported across IATSE’s membership, where departments from set construction to lighting have been hit hard by the slowdown. The Guild’s suspension of its training initiative underscored a grim truth: even the pipeline for the next generation of artists has been temporarily shut off.

Automation and the AI Factor

Automation and AI have compounded the problem. According to Challenger, Gray & Christmas, over 11,000 jobs across industries have been officially linked to AI since 2023 (Vanneman, 2024). In visual effects, AI-driven tools now handle rotoscoping, cleanup, and background generation — tasks that once trained junior artists.

During a 2023 Senate “AI Insight Forum,” IATSE’s Vanessa Holtgrewe warned that such technology threatens established labor protections, saying that AI developers were “circumventing established copyright law” by scraping creative works without permission (Los Angeles Times, 2023). While recent union contracts with SAG-AFTRA and the WGA added some guardrails, enforcement remains uncertain.

A Century of Booms and Busts

Hollywood has weathered economic shocks before — from the Great Depression’s wage cuts to the Paramount Decree of 1948 and the Great Recession of 2008, which cost roughly 31,000 jobs. The 2020 pandemic caused the steepest single-month collapse in history, but the 2022–2025 downturn is distinct for its persistence and reach. It is not a sharp dip followed by recovery, but a long plateau of diminished production, consolidation, and precarity.

For many, this marks the end of Hollywood as a stable, lifelong career path. Soundstages across Burbank sit empty, and once-thriving VFX houses in Montreal, London, and Bangalore are downsizing or closing. The “efficiency” touted by executives now translates to fewer people making fewer projects — often with AI quietly filling the gaps.

A Shifting Future

As the industry redefines itself, the question is no longer when Hollywood will recover, but what form it will take when it does. For now, the entertainment capital of the world faces a paradox: an abundance of creative talent with nowhere to work.

In a business built on illusion, the numbers don’t lie. The past five years have not just tested the resilience of artists and technicians — they’ve exposed how fragile the infrastructure supporting them has become.

Sources

U.S. Bureau of Labor Statistics. (2020, May 8). Current Employment Statistics Highlights — April 2020. https://www.bls.gov/news.release/archives/empsit_05082020.pdf

Otis College of Art and Design. (2025, March). Otis College Report on the Creative Economy. https://www.otis.edu/about/initiatives/documents/25-063-CreativeEconomy_Report4_250325.pdf

FilmLA. (2024, October 9). Scripted Content Study 2023. https://filmla.com/scripted-content-study-2023

Deadline. (2025, March 11). From “Back” To Bust: Inside the Epic Implosion of Technicolor. https://deadline.com/2025/03/technicolor-ceo-company-back-lies-in-ruins-vfx-post-production-1236305304

Variety. (2025, March). Behind the “Sickening” Collapse of Technicolor. https://variety.com/2025/artisans/global/technicolor-collapse-shockwaves-vfx-1236326607

Deadline. (2025, September). List of Hollywood & Media Layoffs From Paramount to Warner Bros Discovery to CNN & More. https://deadline.com/feature/hollywood-media-layoffs-list-1236007845

Vanneman, J. (2024). How Likely Is It That More Than 100,000 U.S.-Based Film, Television, and Animation Jobs Will Be Disrupted by AI by 2026? Quora. https://www.quora.com/How-likely-is-it-that-more-than-100-000-U-S-based-film-television-and-animation-jobs-will-be-disrupted-by-AI-by-2026

The Wrap. (2024, August 28). Art Directors Guild Suspends Production Design Initiative Program. https://www.thewrap.com/art-directors-guild-training-program-suspended

Los Angeles Times. (2023, December 7). Here’s How Many Jobs L.A. Lost During the Hollywood Strikes. https://www.latimes.com/entertainment-arts/business/story/2023-12-07/actors-writers-strike-economic-impact-report