Hollywood is all glitz and glamour from afar, but only an insider could look at the sleepless nights, miles of audition lines, and sometimes a disappointing paycheck. Citing the US Labour Department data, the Wall Street Journal revealed a 30% decline in employment across the entertainment industry — from actors to set designers — especially in production hubs like Los Angeles since 2022.
This decline follows several governments introducing tax incentives to bring back jobs to their respective countries, mainly the UK, US, Australia, and Canada. However, the US has seen a significant decline from 251 productions with a budget of $40 million or more in 2021 to 159 in 2025. In contrast, the UK showed a slight uptick from 239 to 249, the report said citing ProdPro data.
Why are Hollywood jobs in danger?
According to the Academy Award-winning producer and actor of ‘The Pitt’, Noah Wyle, called the significant downturn of employment across television and film a “near cratering of our once thriving industry.” However, it is not just about a decline in pre-production requirements; Hollywood studios are making much fewer films and TV shows, according to the WSJ report.
Shift in shooting locations
Much like the cost of living, the cost of production rises significantly in developed countries, including the hub of cinema in Los Angeles. Several big-budget movie makers prefer to shoot overseas to make the most of tax credits. Non-English speaking countries like Hungary are one of the most popular preferences for filmmakers looking to cut production costs.
At the same time, California is no longer an attractive option for Hollywood when it comes to tax incentives. New Jersey, New York, or Georgia seemed to be a viable option at the time.
However, as per the WSJ report, Studios, labour unions and soundstage owners have been urging the Trump administration and the United States Congress to introduce a federal incentive of about 15 per cent for film and television production. Supporters argue that when this is combined with existing state incentives, which usually range between 20 per cent and 40 per cent, it could make the US far more competitive and encourage more Hollywood productions to stay or return home.
The low production problem
With a direct correlation with the tax benefits, repatriating labour is just one part of the puzzle. Entertainment workers are also suffering due to the overall incentives to produce less. Ever since the onset of the pandemic, OTT giants have been hunting for subscribers and profit.
Factoring in the 2023 actors and writers strike, the only way to get back and cater to the profit-only demand was to cut production costs. Last year, behind-the-scenes craftspeople worked 36% fewer hours than in 2022, according to the International Alliance of Theatrical Stage Employees. This not only took a hit on the paycheck but also other benefits that come with it, like health insurance.
The social media scale
While production and entertainment workers are wary of the downturn, a large section of their audience has also shifted to smaller screens. Several entertainment seekers turn to social media platforms like YouTube, Instagram, or TikTok for bite-sized, low-budget content, which serves the purpose. A large share of time is spent viewing and boosting content produced by the smaller players in the industry, using non-union labour.
Sporty challenges
Live sports have increasingly become one of the biggest drivers of both streaming subscriptions and traditional TV viewership. Major leagues like the National Football League (NFL) and the National Basketball Association (NBA) attract massive audiences, making their broadcasting rights extremely valuable for media companies.
However, the rising cost of securing these rights has created a financial squeeze for entertainment companies. As networks and streaming platforms spend billions to lock in deals with leagues like the NFL and NBA, a larger share of their budgets is being diverted toward sports. That, in turn, leaves less money available for producing movies, scripted series and other entertainment content.
Artificial Intelligence of it all
With the advent of generative AI, a large section of production jobs still trying to survive the entertainment economy may be in danger, as per the WSJ report. Technology is set to enable content that can be produced on a much lower budget, eliminating the need for a physical workforce.