Why Hollywood studios are still downsizing
Last year, the motto for professionals in the entertainment industry struggling with layoffs and reduced film and TV production due to the pandemic was simply to “hold on until 2025.
But now as the year approaches its halfway point, a bleaker saying seems apt: “Exist ’til ’26.”
Optimistic expectations for a strong rebound in 2021 haven’t come true so far. On the contrary, the economic slump, particularly in studio jobs, seems to persist rather than improve.
Over the past few weeks, three major players in media and entertainment – Walt Disney Company, Warner Bros. Discovery, and Paramount Global – have announced job cuts affecting their employees. Disney reduced its staff by several hundred workers across the U.S. and internationally, while Paramount downsized its domestic team by hundreds of members, and Warner Bros. made reductions in dozens of positions.
As a dedicated cinephile, it’s clear that the movie industry is still grappling with the aftermath of the pandemic and the turbulent events of 2023, including the writers’ and actors’ strikes. At the same time, we’re all trying to adapt to the shifting sands of the media world. It’s a challenging yet exciting time for us film enthusiasts!
Hollywood Inc.
3 months ago, the company reduced its workforce by 200 employees in television, followed by another round of job cuts affecting over 300 workers across television, film, and corporate finance sectors.
With more people opting for online streaming services and traditional broadcast television viewership decreasing – along with the advertising revenue it brings – companies are shifting their investments towards these digital platforms. They’re tightening their belts after heavy spending during the competitive “streaming wars” era. Moreover, economic instability caused by tariffs imposed by President Trump has added to the challenging business landscape.
J. Christopher Hamilton, an entertainment attorney and media business professor at Syracuse University, commented, “We’re experiencing a compression of our ecosystem in Hollywood.” He explained that companies are attempting to adapt to the economic pressures globally, find a sustainable financial structure, and determine the most intelligent business strategy for the future.
The situation is quite different from the hopeful signs some in the industry were seeing at the end of last year. Now that the strikes have ended and delayed films are finally being shown in theaters, as well as production gradually resuming, there’s a feeling that “we’ve moved past the strikes, we can get back into the market to trade again,” according to Hamilton.
Instead, his recent dialogues with clients and media moguls have predominantly revolved around apprehension and ambiguity. They express difficulties in marketing a television program or doubts about the longevity of their positions. Moreover, the global market has started to lean towards local productions, leading to fierce competition between U.S. shows and locally-produced series.
Hamilton stated, “Currently, it’s a challenging period for businesses, particularly in terms of content creation and production. There’s a general reluctance towards taking risks, as people are worried about potential job losses.
According to Stephen Galloway, dean of Chapman University’s Dodge College of Film and Media Arts, the concept of “surviving until ’25” was never a reality, as the challenges the industry faces are persistent and profound.
He mentioned that the sector is experiencing layoffs, and it seems like this restructuring could persist for an extended period.
As someone who appreciates the evolving landscape of entertainment, I’ve noticed that many studios are faced with the challenge of declining linear TV viewership. Despite this drop in audience, traditional broadcast TV continues to bring in revenue, which emphasizes the need for cost management and profit generation as long as it remains viable.
That also means job cuts in those areas.
As a movie connoisseur penning my thoughts, I’ve noticed a shakeup within the creative landscape. Disney, the magic weaver of our childhood dreams, has recently let go of its film and television marketing personnel, publicity for the small screen, casting directors, development teams, and even financial operatives. Warner Bros., another titan in the realm of entertainment, has trimmed its cable TV workforce. Paramount, a name synonymous with blockbuster movies, hasn’t divulged which departments are feeling the pinch from these layoffs; however, their co-CEOs hinted in a staff memo that this decision was made as they steer through “persistent industry-wide declines” in traditional television viewing.
Media firms are splitting their conventional television operations, such as cable networks, from their main businesses due to challenges faced by linear TV. In 2023, Lionsgate, based in Santa Monica, initiated this trend by announcing plans to separate its film and TV studio business from Starz, its pay cable unit. This separation was finalized this year.
Towards the end of last year, Comcast Corporation announced plans to form a new company encompassing their cable channels like CNBC, MSNBC, and USA Network. Meanwhile, on Monday, Warner Bros. declared they would also divide into two separate publicly traded companies – one named Streaming & Studios, and the other called Global Networks, which includes its cable networks such as CNN, TNT, and Discovery.
The Warner Bros. separation signifies an acceptance that the concept of creating something substantial to compete in the streaming battle wasn’t successful, according to Peter Murrieta, a writer and deputy director at the Sidney Poitier New American Film School, Arizona State University. Furthermore, Netflix’s stronghold in the streaming industry has led numerous companies to reconsider their strategic plans.
He stated, “It was evident that the current quantity of shows and streaming platforms was unsustainable. This is a result of striving for competition in the streaming market and believing it’s the way forward. Consequently, resources were allocated, but now, readjustments are necessary.
In a statement made to Wall Street, Disney’s CEO, Bob Iger, admitted that Disney was releasing an excessive amount of content, attempting to keep pace with Netflix in terms of quantity.
Following Iger’s recommendation to prioritize quality over volume and reach profitability in their streaming services, the company has scaled back its operations. Now, the company’s recent job listings feature several opportunities for software engineers.
People in Hollywood are worried about how larger economic issues might impact their business as well. Alongside concerns unique to the entertainment industry such as artificial intelligence and the dwindling popularity of traditional TV and cable, they’re also dealing with economic instability both domestically and internationally. The executives at Paramount specifically mentioned the “changing economic landscape” in a memo to employees.
Currently, there is a palpable fear among professionals in their respective fields that they may lose their jobs, that the traditional methods are failing, and that they won’t earn as much as they used to, according to Galloway of Chapman. While it’s understandable for them to feel this way, I believe they’re overestimating the level of fear because what’s happening is a pullback, and it’s a pullback after a massive growth period.
In various sectors, white-collar positions are facing potential displacement due to advancements in technology, increased spending on AI, and job cuts following the surge of hiring during the pandemic period. This year alone, tech companies like Square, Facebook (Meta), Google, and Workday have announced plans for workforce reductions.
As a seasoned movie critic, I’ve seen firsthand how the film industry ebbs and flows, akin to a rollercoaster ride. Yet, in periods of transformation, fresh horizons often come into view. The landscape is shifting, with jobs in virtual production and artificial intelligence gaining traction. Amidst downsizing in traditional studio roles, there’s an undeniable need for producers to guide the creative journey of films and shows. Susan Sprung, head of the Producers Guild of America, echoes this sentiment.
She stated, “These businesses continue to excel in creating exceptional programming, films, and TV shows. If your leadership team isn’t expansive enough to assist, it becomes crucial to ensure that skilled producers are involved in every project.
In a challenging current landscape, Murrieta of Arizona State emphasized that the industry has historically been demanding, yet those within it have consistently proven to be adaptable and deliberate in their professional endeavors.
Though it is a trying time, he said, “there’s got to be hope.”
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2025-06-15 13:31