California’s creative squeeze has a different culprit

The entertainment business has spent the last few years doing what it often does best when money gets tight: shrinking. Budgets were cut, jobs disappeared, and some work moved overseas as Hollywood retooled for streaming and major companies pushed through mergers. That contraction happened to overlap with the rise of generative AI, including ChatGPT in 2022, which made for a tidy narrative. Convenient, but apparently wrong.

A new report from Otis College of Art and Design argues that generative AI is not the main reason California’s creative workforce has lost so many jobs recently. The annual study covers film, fashion, gaming, media, advertising, arts, and architecture across the state.

“The pattern of job loss in terms of the types of jobs that are being lost and when they’re being lost does not support the fact that there’s been this displacement of workers by AI,” said Patrick Adler, a founding partner of Westwood Economics and Planning Consultants and one of the report’s co-authors. “What we do find is that AI has, in the creative economy, dramatically changed how work is being done.”

What the report found

The 2026 report, “Creative Disruption: AI and California’s Creative Economy: 2022–2025,” was prepared by Otis College and Westwood Economics and Planning Consultants. It uses public data for quantitative analysis and interviews with creative workers for qualitative context.

Between 2022 and 2025, California’s creative economy lost 14 percent of its jobs, equal to 114,000 positions. The losses were concentrated in two areas:

  • Film, television and sound, where jobs fell by nearly 30 percent
  • Traditional media, where jobs dropped by nearly 34 percent

Even so, the report says the occupations most exposed to AI in the creative economy, including writers, software developers, and artists, have been growing rather than shrinking. Job postings for those roles have also increased. So much for the simple robot-took-my-job storyline.

The bigger explanation, according to the authors

The report says the job losses are better explained by a mix of lower-paid workers leaving California because of the state’s high cost of living and structural changes in creative industries that hit California harder than the rest of the country.

It also points to the budget cuts that followed Hollywood’s Peak TV era. The streaming boom gave way to a more cost-conscious phase, and that transition has not exactly been gentle.

AI is changing tasks, not whole roles, at least for now

The report’s more reassuring finding for workers is that generative AI appears to be replacing specific tasks rather than entire jobs. After interviewing people in California’s creative industries, the authors wrote that “No single respondent described AI as having replaced an entire role or workflow.” They added, “Where AI is used, it is deployed for well-defined activities where the output is verifiable, time savings are clear, and the quality of output meets expectations.”

A clear example came from postproduction work in film and television. AI can help with tasks like rotoscoping and wire removal, but it struggles with more creative work. It also creates extra work when humans have to check and fix what the software produces.

One VFX company owner quoted in the report described an AI-assisted television production this way: “They have 15 artists that are sitting at workstations fixing the AI… When you multiply the rate of the artists by 15 and put that against the cost of the work you’re doing, it negates any savings that AI is giving you.”

Workers still have some control, and plenty of doubts

The report argues that creative workers also have a meaningful role in deciding how much AI gets used. Supervisors may set the rules, but the people actually using the tools are usually the workers themselves.

As the authors put it, “A worker who believes in the technology will iterate patiently; a skeptical one may conclude that AI is not yet able to perform a particular task. Both views were present among interviewees.”

They also found persistent concern about the ethics of AI use. Some workers even hid when they used it, worried that admitting it might make them look replaceable. In creative fields, apparently, nothing says “innovation” like pretending you did not touch the new tool.

The real risk: lowered standards and higher pressure

While the report says AI is not currently displacing California’s creative workforce on a large scale, it does say the technology is already changing creative work in less visible ways.

Interviewees said AI is raising productivity expectations, encouraging managers to buy software instead of hiring collaborators, and pushing workers toward faster output that can be lower in quality.

One motion creative director recalled a telling moment: “The creative director said, ‘At a certain point, you just have to say it’s good enough,’ which I think is the biggest danger of AI. We lower our standards.”

What the authors want companies to do

The report recommends that creative organizations slow down the rollout of AI tools and reduce the stigma around using them. One suggested step is a hiring freeze or similar policy that reassures staff they are not training themselves out of a job.

The logic is straightforward: workers are more willing to experiment if they do not think every successful experiment comes with a pink slip attached. As the report says, “Workers who know they will not be adopting themselves out of a job will experiment more openly, share insights more freely, and invest genuine effort into making AI tools work.”

Adler summed it up more bluntly: “There’s pretty good evidence that we’re uncovering that AI adoption would be a lot faster, a lot deeper if creative workers had more trust in it.”

For now, the report’s message is less “AI is taking over Hollywood” than “Hollywood has been trimming itself for other reasons, and AI is changing the workflow while everyone argues about the future.” Which, frankly, feels more consistent with how the industry usually handles upheaval.