The Hollywood writers’ and actors’ strikes of 2023 had a devastating effect on the VFX industry. We look at how facilities have coped with the situation, and how the recovery is set to unfold in 2024

When scripted projects affected by the SAG-AFTRA and WGA strikes ground to a halt last year, VFX studios dependent on that work faced a tough challenge: how to minimise staff losses while keeping their businesses afloat. Sadly, some companies did not manage to remain viable and closed down, many employees were made redundant, and freelancers faced – and still face – unprecedented levels of unemployment. 

To put it in perspective, Neil Hatton, Chief Executive of the UK Screen Alliance, tells us: “During Covid we estimate that 23 percent of jobs were lost, either through redundancy or non-renewal of contracts. We think that the strike impact has been worse, as this time there was no furlough support, and the job losses could reach 40 percent.”

The strikes ended before Christmas, but getting productions moving again has involved a raft of logistical difficulties, so the industry is still suffering a lengthy hangover effect from the pause.

Racheal Penfold, co-founder and director of boutique studio One of Us, tells us that although it’s usual for them to manage a “normal ebb and flow” of work, “the strikes have created a gap which has been hard to deal with, especially for an independent studio”.

One of Us worked on sci-fi drama Constellation (Image credit: Apple TV)

Despite great reluctance to let people go, the company has had to cut costs to keep the business viable. “We have been forced to bring our losses down to a manageable level,” says Penfold. “We have had fantastic collaboration from our incredible staff, many of whom have agreed to reduce hours or take unpaid leave. But we have also, sadly, made some redundancies.”

Cinesite London General Manager, Jocelin Capper, tells us: “The impact of the strikes is still affecting Cinesite and the rest of the group to a differing degree. Specifically VFX and Animation have been impacted for the most prolonged period I have ever known because we’re at the back end of the production workflow. Like all VFX and animation studios, we have had to reduce our crew numbers to reflect the reduction in films and episodic being in production.”

Capper explains that when the strikes hit they looked to cut costs wherever possible. But as margins on VFX projects are such that the business already has to be very efficient, they moved to streamline some of the infrastructure of the company: “We consolidated some real estate in the Cinesite group – an example is Imaginarium Studios giving up their premises at Ealing Studios and moving into Cinesite London’s studio. We have also turned some of our space into ‘client space’ – we intend to let to productions/studios, hopefully when they work on a show with us or a sister company.”

She notes that Cinesite’s feature animation service division, as well as gaming, mocap and immersive services also helped to stabilise the business. 

Like many VFX houses, Cinesite sought to adapt to the situation by diversifying its income streams. Two new service divisions were launched during the downtime: Immersive, which creates large scale art projects using light projection and large LED screens, and VIS, which will expand the studios’ previs, virtual production, techvis and postvis services. The Cinesite VIS team is led by Richard Clarke, who was Head of Postvis at NVIZ, one of the companies that shuttered as a result of the strikes.

Cinesite Immersive’s Rembrandt seascape for Frameless

Capper tells us the new VIS department will create efficiencies for clients: “I’m excited for us to be able to offer our clients the option to place their previs, postvis and VFX under one roof rather than having to wrangle multiple companies over many months,” she says. “This will provide greater flexibility and consistency and can reduce costs for them.” She describes the two new divisions as “massive positives” that have come out of a negative situation. 

For some companies, the impact of the strikes has only started to bite in 2024. Being at the end of the pipeline, many businesses were working on projects that finished shooting before the industrial action began, and had enough work to carry them through the actual strike period. 

Others were spared the worst of the situation by the fact of their having a diverse client base that gives them a spread of work across different content types beyond the scripted projects that were affected by the strikes. 

Milk VFX is a company that benefited from both of these factors. Neil Roche, Deputy CCO and VFX Supervisor, told us: “Like all VFX studios the strike has had an effect on us. However, as Milk has diversified into the factual space, we have recently partnered with a production company to collaborate on a massive VFX heavy show not reliant on SAG actors or WGA screenwriters. This takes us through to the end of Summer 2024, so we have been able to largely carry on business as usual.  

“Milk was also fortunate to have a large slate of episodic and feature films that took us to the end of 2023 and even into early 2024 as well. Not being wholly reliant on scripted fiction work has helped navigate us through the strikes and will keep us in good stead whilst we start to secure work in 2024.”

Milk was lead vendor on Good Omens: Season 2, from Amazon Studios and BBC Two

As we head towards the summer, we’re seeing some recovery to the VFX industry as stalled productions get back on track, and new projects are commissioned. But there are a couple of factors holding this back. The first is that productions affected by the strikes can’t just pick up where they left off, as actors and other key people and resources have moved on to other things and it’s logistically complicated to get these things back into alignment. 

The second factor is that the industry isn’t going to go back to how it was before. All the focus on the strikes has diverted attention away from other goings on last year that have conspired to reduce the number of projects being commissioned and the budgets those projects have. 

Capper says: “The strike was just one issue in a more general production slowdown for all genres, so while there is now light at the end of the tunnel for scripted inward investment production, there are other problems depressing business levels in post production and animation in the UK which still persist. The lack of advertising revenue leading to less commissioning by broadcasters in all genres; the market failure in children’s TV and lack of development funding; budget cuts that seem to have no end at the BBC; a distracted Channel 4; and an audience struggling with a cost-of-living crisis, to name but a few factors contributing to a perfect storm.”

Freelancers have been hit particularly hard, and the industry as a whole will suffer the consequences of this later in the year when work picks up and many of them have reskilled and found work elsewhere. Capper explains: “For many VFX workers, this will have been the second long-term lay off since 2020. Some people will leave the industry, never to return, further exacerbating skills shortages once the rebound in work eventually comes.

“This has been an incredibly difficult time for artists in the VFX industry. Many talented and experienced artists are out of work even now that the strikes are over, it will take some time to get the enormous cogs of the film industry turning again. Acknowledging the genuine concerns and uncertainties that individuals in our industry face today is crucial.”

HBO’s True Detective: Night Country (recently delivered VFX from Cinesite London)

In 2024, studios and streamers will make adjustments to suit the new economic landscape, and to fulfil the agreements that they made to end the industrial action. 

Capper tells us: “In the aftermath of strikes, we know the studios and platforms expect to employ varied content strategies. Amazon, Apple and Comcast are expected to increase their content spend, whilst the majority of studios and platforms will have stricter control over their content spend. Netflix content spend is expected to surpass expectations given recent subscription account and financial outperformance. However, in many studios/streamers, there has been consolidation; they also need to work out what the impact of the new agreements are and where their budgets are best spent. We’ve all been getting our houses in order.

“Since the beginning of the year Cinesite has been awarded a handful of exciting contracts for a mix of both feature films and high end episodic. There is light at the end of the tunnel, but the speed of projects getting green-lit post strikes across the sector has been slower than we and everyone in the industry expected.”

Roche notes that structural changes among the studios mean that we’ll see fewer projects commissioned in the future: “There has been a sea change in the studios with various companies merging or restructuring which has also slowed down production. The strike was a point where the studios could de-escalate the content wars and reset. The assumption is that there will be less content created, but hopefully with a bit more investment. However the deals that were struck by the WGA and SAG-AFTRA need to be funded from somewhere, and it’s quite possible this could be from post-production budgets.”

He expects the job market for artists to pick up slowly as we approach the summer. “VFX is a very linear process so I would say that pre-viz and asset artists will be the first positions required and then animation, FX, lighting and comp as projects move through into shot production.”

Penfold explains that the film and TV industries are still going through a post-Covid shift, and this new direction will in part determine the course of the recovery. There’s “a revived appreciation for the experience of going to the cinema,” she says. “Cinema and movie theatres are finally seeing a recovery; people are seeking out films that they might not be able to access or might not want to watch at home. And it has been an exceptional year for film releases! 

“However, a new focus on quality more than quantity from all producers, film studios to streaming platforms, mean an inevitable easing of demand for capacity, whether that’s in VFX or any other part of our production process. A bit of a reset, not a post-Covid boom. Recovery this year will be slow, but towards the end of the year and into 2025 we will see demands increase.”

Looking further ahead, Penfold says this event will have lasting effects on both the industry at large and on One of Us as a company. “This is another blow to an industry which is already under pressure. When budgets are tight the squeeze gets concentrated on the end of the process. And the desire to drive down costs will only continue. Technology will be used increasingly to find efficiencies.

“As for One of Us, we are an independent studio. It has taken us a long time and a lot of careful decision making to get to where we are. But after nearly twenty years we are used to rolling with the punches.”

MARZ delivered VFX for 20th Century Studios’ The Creator

Jonathan Bronfman, CEO at MARZ, tells us: “I don’t think the industry will ever be the same. It will recover slowly in 2024. The streaming wars cost studios too much money and now they are all reevaluating their strategies.”

He notes that AI will play a big role in how things shake out. “Technology is pushing out the traditional approach, something which is long overdue. Studios in Hollywood have been operating the same way for decades, and now AI will move them off their pedestal.

“The entire industry is in for a reckoning. I think studios would have come to this realisation eventually, so it was inevitable, but I think the pressure from the strikes accelerated this.”

Tanya Combrinck
Author: Tanya Combrinck

Tanya is a writer covering art, design, and visual effects. She has 15 years of experience as a magazine journalist and has written for publications including 3D World, 3D Artist, Computer Arts, net magazine, and Creative Bloq.

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