Hollywood’s continued job losses are raising concerns that Los Angeles could permanently lose part of the entertainment economy that shaped the region for generations.
U.S. employment in motion picture and sound recording fell by roughly 25% from its mid-2022 peak through early 2026. Los Angeles County alone lost an estimated 42,000 entertainment jobs over two years, according to figures cited by Sen. Adam Schiff.
Film and television production has been moving to other states and countries, while studios produce fewer projects. California expanded its tax credit program in response, and industry leaders are now seeking a federal incentive to keep more American productions from going overseas.
Entertainment employment fell sharply
National employment in motion picture and sound recording exceeded 455,000 jobs in July 2022.
By March 2026, the total had fallen to about 344,000, representing a decline of roughly one-quarter. The industry remained well below its earlier peak even as employment briefly improved during parts of the recovery.
The figures include workers across the United States, not just in Hollywood. However, Los Angeles remains the country’s largest production center, meaning national industry weakness has a particularly visible effect there.
Los Angeles lost about 42,000 jobs
Schiff said Los Angeles County had lost approximately 42,000 entertainment jobs during the previous two years.
He discussed the losses at a March 20, 2026, hearing in Burbank attended by actors, union leaders, producers, local officials, and other industry representatives. The hearing focused on keeping film and television production in the United States.
Job losses affect more than actors, directors, and writers. Productions employ camera operators, set builders, costume designers, drivers, electricians, caterers, editors, makeup artists, and thousands of other workers.
Crew members have lost working hours
Below-the-line workers have faced some of the most serious consequences, as many are hired only when production is active.
The International Alliance of Theatrical Stage Employees said its members had lost tens of millions of hours of work since 2022. Union President Matthew Loeb warned that international tax incentives were drawing projects and their jobs away from the United States.
A production that leaves California can affect hundreds of workers directly. It can also reduce business for equipment rental companies, hotels, restaurants, transportation providers, construction suppliers, and other local services.
Production is moving to cheaper locations
California faces competition from New York, New Jersey, Georgia, Canada, the United Kingdom, Hungary, Australia, and other production centers.
Many of those locations offer tax credits, rebates, lower labor costs, or favorable exchange rates. The United Kingdom has become particularly attractive for major studio films because it combines experienced crews, large sound stages, and national incentives.
Los Angeles also has high housing, labor, insurance, permitting, and location costs. Studios may save money by filming elsewhere even when a story is set in California.
Studios are making fewer projects
The decline is not entirely caused by production leaving California.
Streaming companies and traditional studios have reduced spending after years of rapid expansion. Some platforms ordered large numbers of shows to compete for subscribers, but many later shifted their focus to profitability.
Audiences are also dividing their time among television, movies, YouTube, TikTok, gaming, and other forms of entertainment. That competition has made studios more cautious about approving expensive projects.
The 2023 writers’ and actors’ strikes created another major interruption. Production did not immediately return to previous levels after new labor agreements were completed.
Artificial intelligence adds uncertainty
Artificial intelligence has become another source of anxiety for entertainment workers.
Studios and production companies are exploring AI tools for visual effects, dubbing, editing, script analysis, marketing, animation, and other tasks. Some applications may assist existing workers, while others could reduce the number of people needed for certain assignments.
Labor agreements have added protections involving writers’ work and digital replicas of performers. However, unions continue to argue that technology should support creative workers rather than replace them without compensation or consent.
AI has not been identified as the main cause of Hollywood’s recent employment decline, but it could influence how quickly certain job types return.
California expanded its tax credit
California increased its annual Film and Television Tax Credit Program from $330 million to $750 million in 2025.
The expansion raised the base credit rate, widened eligibility, and provided more support for independent films and other productions. State officials said the goal was to retain below-the-line jobs and encourage film projects to shoot in California rather than in competing locations.
The larger program has attracted new films and television shows, but it may take several years to determine whether the incentives can reverse the broader employment decline.
Critics also question whether public money should subsidize profitable studios. Supporters respond that productions generate tax revenue and spending across many local businesses.
A federal incentive is being considered
Schiff said he was developing bipartisan legislation to establish a federal film and television production incentive.
A national credit could help the United States compete with countries that offer incentives across their entire territory. State programs can influence where a production films domestically, but they may be less effective when the competing location is overseas.
The proposal had not yet become law. Schiff said it would need bipartisan support, and lawmakers would have to decide which productions qualified, how much the program would cost, and whether recipients should meet job or spending requirements.
Early signs of recovery remain limited
FilmLA reported that on-location production in Greater Los Angeles fell 13.2% during the third quarter of 2025 compared with the same period a year earlier.
The organization later found some improvement in selected categories. Feature film production recorded 687 shoot days in the first quarter of 2026, up 52.3% from the same quarter in 2025.
Those gains offered encouragement but did not erase years of lost jobs and reduced activity. Hollywood’s future will depend on production volume, costs, tax policy, labor agreements, technology, and whether California can remain competitive with locations around the world.
TL;DR
- U.S. motion picture and sound recording employment fell roughly 25% from its July 2022 peak through March 2026.
- Los Angeles County lost an estimated 42,000 entertainment jobs over two years.
- Fewer active productions have hit crew members and local businesses.
- Tax incentives and lower costs are drawing some projects to other states and countries.
- Studios are also making fewer movies and television shows after reducing streaming spending.
- California expanded its annual film and television tax credit from $330 million to $750 million.
- Sen. Adam Schiff is seeking bipartisan support for a federal production incentive.
- FilmLA reported some improvement in early 2026, but overall employment remained far below its peak.
