LOS ANGELES, Dec. 29 (Xinhua) -- Traditionally considered to be in an industry that has the ability to stay away from economic downturns, Hollywood movie studios began to feel pains in 2008 when a credit crunch resulting from the U.S. housing crisis turned into the worst economic recession since the Great Depression.
With almost every sector of the economy being hit hard by the financial crisis as consumers reduced their spendings and companies laid off employees, few industries could remain immune from the deteriorating economic situation, entertainment executives and industry observers said.
Hollywood's major studios have been retrenching their operations in recent months by cutting back production projects and slashing marketing jobs, mainly due to the reluctance of their parent companies to risk more movie investments amid declining advertising revenues and worsening financial conditions.
The entertainment industry in fact has been bracing for massive job cuts since Warner Bros. Pictures, owned by media conglomerate Time Warner, announced laying off as many as 1,000 employees in January in the wake of the 100-day strike by Hollywood writers.
The strike, launched by the Writers Guild of America after the union failed to renew its three-year labor contract with studios through negotiations, had halted the production of many new television drama episodes and delayed some film projects. Some economists estimated the lingering work stoppage cost the industry about 2 billion U.S. dollars in losses.
Although Hollywood has recovered somewhat from the devastating strike almost a year ago, the global credit crunch and economic recession are forcing entertainment companies and movie studios to tighten their belts in preparation for a major slump.
Universal Pictures' parent company NBC-Universal announced earlier this month the layoff of 500 jobs, or 3 percent of its staff, while Viacom, which owns Paramount Pictures, cut 850, or 7 percent of its workforce.
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