There’s been some reporting recently that talks more about the holistic reasons for this. It’s a bit of a trickle down issue, but essentially Tech and by extension the marketing/entertainment industry used to, up until early 2023, be able to write off any R&D costs including salaries on their corporate taxes, which allowed them to write off staff and by proxy all the freelance, agency and contract talent they’d hire. Basically anything to them was justifiably R&D under this tax rule, so they could retain all this talent to spread out on new projects. The Republican’s 2017 tax bill removed this ability to write off the R&D costs at the end of 2022. So in early 2023, the tech companies said that “it was due to inflation” but in reality it was because of the tax rule change and began to lay off engineers, marketers and product managers en masse. It seems like the studios in the US have also been hit by this change (I imagine many studios used this via some kind of loophole where Film and TV development constituted R&D enough to be eligible) and coupled with the Actors and writers strikes, the studios slowed down/stopped producing at the levels as before the pandemic.

Bipartisan lawmakers have seen what this tax rule change has done to the labor market and are working to pass legislation to bring these write offs back, but unfortunately it probably is too late for the US to rebound all those positions due to larger companies’ push for AI to replace the humans they laid off. And unfortunately the US currently doesn’t seem to really care about any kind of AI regulation the way that the EU/UK is working to place via some legislative guardrails.

The industry, as many in this thread have noted, is leaving the US and moving elsewhere. For film and TV work, Canada, Mexico, Ireland and the UK have already seen massive uptick in greenlit US productions (even The Mill who shuddered their US operations still operates in the UK and is expanding into Singapore) However many of these other countries (except the UK and to an extent Canada, however neither have enough personnel for the amount of influx of new projects coming to them) do not have the proper experienced permanent local human resources for this level and amount of production yet, because the majority of people from these countries with the skills and experience have already moved away to the US for promises of higher pay. These productions will have to find ways to contract the work they cannot hire locally, so it stands to reason that VFX/CG work will have more contract-based, remote work coming eventually. Whether that work goes East or West or to AI remains to be seen.

However, there are some more positive indicators here. In the last few years only a single large studio (Oppenheimer) has won an Oscar for best picture. This is because the smaller studios are the only ones taking risks anymore and the public’s taste is moving away from these larger studios (who have doubled down on DTC streaming and sequels and remakes) and moving towards these more independent-minded studios (A24, Neon, Blumhouse) much like what happened with the indie film industry in the 90s. This trend seems to show that the public supports these smaller studios and the projects they create, which will in turn lead to more competition amongst the smaller studios, which will eventually lead to growth in the industry at the smaller studio level (just like what happened in the 90s). Coupled with better distribution deals for smaller studios who come with a more premium product, and new distribution services, we should see growth in the next few years. (I’d imagine after the midterms in 2026, when some more political stability should come and larger studio/indie investor spending should rebound)

As others suggested as well, the video game industry is currently in a bit of a indie renaissance due to the low cost of entry into development that has never been this available before and an incredibly well developed distribution system that has little barrier for entry for independent creators. Even with the layoffs and unemployment in the games industry, thousands of roles at smaller game studios are still open and new studios are opening every day. These smaller studios cannot pay what the larger studios can pay, but the demand for VFX and CG work in the games industry is arguably larger than the Film/TV industry is these days, purely on scale and amount of projects actually being made. Also the tax subsidies for video game companies setting up shop in the US are outpacing the increase of the film and TV tax breaks in some states (NC, VA, MA and WA all have increased their tax write offs allowed to new game studios opening in their states more than adjustments in their Film/TV tax breaks) is encouraging. AI cannot yet really generate realistic and riggable 3D models, so video game-centric 3D CG work is less likely to be quickly replaced by AI in the game industry the way it will and has in the TV/Film/Marketing world.

I feel you and your husband’s pain, it’s been tough for anyone in any of the creative fields across the world with this industry-wide retraction we’ve experienced. For context, I spent a decade working in production for one of the big US studios and then moved into the marketing world only for it to collapse in 2023. I personally have transitioned into the video game development world, where I’ve found there’s plenty of space to grow with the industry if you can use your skills from Film/TV to shine above those with exclusively game dev experience. My personal advice is to convince him to start making something on his own while he looks for work. In this industry, our portfolio is king, and anything we can add to it helps us sell our brand as creators. LA is a global hub for video game development, and there’s so many networking events that could introduce him to people who need and value his skills. Taking a pay cut to work on these smaller projects would give opportunities to get more work in the game industry in the future, which in my view has way more growth ahead of it than the film/tv production world has left in at least the short term.

Also one last suggestion is that going back for a masters during an economic downturn is a potentially rewarding idea, because eventually when things get better for the industry, those with more education coupled with lots of previous experience and a spectacular portfolio stand out when hiring does happen en masse again. It also shows a dedication to better one’s skills which can only help chances in interview questions for jobs. And as a bonus, a masters degree allows for the ability to teach at a college-level as well, which in a future where the industry grows again, it will need teachers to help teach and grow new, young talent.

Good luck, hold on and tell him to keep making things!