Six months. A 17 percent dip in entertainment employment in the L.A. area. Billions in estimated economic activity lost to the state of California. Could it happen again?
Three years after the double writers and actors strikes rocked Hollywood, it’s a question many in the industry are reluctantly being forced to consider once more. Contract negotiations for the industry’s top unions are around the corner, with the performers group SAG-AFTRA kicking off talks Feb. 9. The Writers Guild is in discussions to start its negotiations March 16, The Hollywood Reporter has learned, while the Directors Guild is looking at May 11.
Perhaps the biggest factor at play in these 2026 negotiations will be the state of the Hollywood workforce. Namely, that it’s been battered in the past few years amid a contraction in the business and the flight of production from the U.S. There were 25 percent fewer jobs in entertainment in L.A. in 2025 than there were three years earlier, an Otis College of Art and Design report found that year.
Corporate consolidation hasn’t been helping matters: In 2025, Paramount said it would lay off 2,000 employees after its merger with Skydance, and many more thousands of jobs could hang in the balance if Netflix’s planned acquisition of Warner Bros., a major employer in town, is completed.
The question, then, is whether the sluggishness of the business, the suffering of union members and threats on the horizon might dissuade either side from playing hardball — or whether recent events will embolden one or the other.
Echoing one popular view, a top talent lawyer believes the slowdown will prevent any fireworks in 2026. “Our industry is reeling,” this person says. “I don’t think the studios can afford it, and I don’t think the talent can afford it.”
There’s another line of thought, however, that the unions are facing an existential threat in AI and have to act to strengthen protections first negotiated in 2023. “I think this is going to be a big fight. I think this is the time. I think it’s huge,” predicts top corporate and entertainment lawyer Schuyler Moore. “It’s all AI, and there will be a strike because this is make-or-break for guilds.”
By starting in February, SAG-AFTRA is leaving plenty of time to negotiate before its contract expires June 30 — in fact, the union has told members it has a backup window for discussions if the initial talks don’t yield results. “A strike is a possibility,” chief negotiator Duncan Crabtree-Ireland said during a Consumer Electronics Show panel Jan. 8. But with the generous runway, “there’s no reason we should not be able to reach a fair deal.”
The same can’t be said for the WGA, which is considering negotiations less than a couple of months ahead of its May 1 contract expiration. Already, some industry observers are sweating at what that might portend, given that the WGA can safely be called the most aggressive union of the three. The DGA also doesn’t have much of a cushion before its June 30 contract end date, but it has a vastly different reputation as a union that prefers diplomacy with employers over hand-to-hand combat.
Health plan funding will be a major theme. The strikes, the recent downturn in work and health care inflation have all taken their toll on union plans. Both the WGA’s and DGA’s plans lost money in the 2023 and 2024 fiscal years, with the WGA fund cumulatively losing $122 million and the DGA plan losing $43 million, according to recent tax returns. Unions undoubtedly will be arguing to raise employers’ contributions in the coming months, while employers may be arguing benefits need to be cut.
“Stabilizing the plan for the future is of vital importance,” the DGA’s national executive director Russell Hollander and its new president, Christopher Nolan, told their members in November. For this story, Hollander says his union’s health plan “is not immune to the health care crisis confronting our nation” and while health care inflation has reigned over the past decade, the studios’ contribution rate to the plan has been “essentially flat.” He added that “we will be looking to the employers to pay their share of these increased costs” as contract talks loom.
AI likely will also be a key issue for all unions. The labor group with the most exposure is SAG-AFTRA, and so far Crabtree-Ireland hasn’t altered his typically measured tone about the issue. At CES, he suggested the labor group would try to make performers generated by AI as expensive as humans. “In my opinion, if synthetics cost the same as a human, they’re going to choose a human every time,” he said.
Other items on deck for SAG-AFTRA will be adjustments to casting processes and boosting income, newly elected SAG-AFTRA president Sean Astin says. “People need their wages; they’re having a hard time qualifying for health care. They need cost-of-living, inflation [adjustments]. People need to make more money.”
For the WGA, the perennial issue of “free work” could crop up. During leadership elections for the West Coast branch of the union last year, several victorious candidates lambasted expectations for members to perform extracurricular work before and after they’ve landed a job. “More than ever, in a brutal employment climate, writers cannot be held hostage to free work demands that make it impossible to plan financially,” the union’s now-president, Michele Mulroney, wrote in her candidate statement. It’s possible the union could look to add new regulations in its contract to change that.
As for the employers, labor stability already has emerged as a clear objective. The AMPTP has considered floating five-year deals rather than the typical three-year contracts, reconsidering norms that have been in place since the 1940s. Odds are the unions would only consider such a major change if significant sweeteners were attached.
With SAG-AFTRA first up for talks, leaders of the performers union are not leading with inflammatory rhetoric, though it’s unclear if the kumbaya moment will last. “All we do in negotiations, I think, largely, is identify problems that are our problems that will eventually become their problems,” says SAG-AFTRA national board member Jason George. “And we try and point out to them how it is their problem, not just our problem, and let’s find solutions.”
Chris Gardner contributed to this report.
This story appeared in the Jan. 15 issue of The Hollywood Reporter magazine. Click here to subscribe.