Major Hollywood talent agency Creative Artists Agency is planning to lay off 60 people amid the fallout over twin strikes by actors and writers that have roiled Hollywood.
The reductions are expected to happen across multiple departments and will begin next week, said a person familiar with the cuts who was not authorized to comment.
The Century City based company, which has more than 3,000 employees, declined to comment.
The layoffs are the latest sign of downsizing in the agency business, which has been hard hit by the work stoppages that have dried up the commissions agents collect from their clients.
Even before the strike, agencies were looking to rebound from business losses due to the pandemic, a fight with the Writers Guild of America over packaging fees and sweeping changes in the television business brought on by streaming.
Some representation firms have already shed positions this year. In February, United Talent Agency laid off some of its workforce. In May, Verve reduced its support staff and salaries of some agents.
Studios have also undergone rounds of layoffs as they face pressure from investors to improve the finances of their streaming businesses. Walt Disney Co. cut 7,000 jobs earlier this year and Warner Bros. Discovery last year made significant cuts.
In recent years, major talent agencies have worked to diversify their business, delving into other areas of representation like sports and influencers. Endeavor, the parent company of Hollywood talent agency WME, has invested in other types of companies including mixed martial arts promotion company UFC and live events.
In a Tuesday earnings call with investors, Endeavor’s chief financial officer estimated the strikes will impact the company’s revenue by about $25 million each month, and its CEO Ari Emanuel estimated that the strike will take months to resolve, not days.
“Time and again, our industry has navigated change and now is no exception, as we adjust to new distribution models and technologies,” Emanuel said. “There are real issues to work through and we continue to stand with our clients, advocate on their behalf and push for a resolution that protects their creative and commercial interests.”
Last year, CAA significantly beefed up its staff to a total of 3,200 employees after it bought ICM Partners in a deal valued at $750 million.
One of CAA’s major investors is private equity firm TPG. In 2014, TPG increased its ownership stake in CAA to 53%, up from 35% in 2010.
CAA has been in talks to sell a majority stake of its business to French billionaire Francois-Henri Pinault. A deal, first reported on by Bloomberg, could close in the coming weeks.
For many local businesses tied to the entertainment industry, the dual strikes – the WGA have been on strike since early May and actors joined them on picket lines last month– are another challenge following production shutdowns during the early days of the pandemic due to concerns about the coronavirus.
Major agencies including CAA, United Talent Agency, WME and other entertainment businesses laid off, conducted salary reductions or held furloughs to reduce costs during that time.