Vanity Fair's decision to remove James Franco from their annual Hollywood issue is just the latest development in his downward spiral following several sexual misconduct allegations. A source told ET that the removal was a major "kick in the gut" for Franco. 

"He was supposed to be on this cover with all these Hollywood icons," the source said. "It's a very momentous moment. Opportunities like this don't come around often. The cover was shot months ago, but I don't know when they decided to remove him. James knew he was being cut as soon as the story [about his inappropriate behavior] broke. He'd been bracing for the fallout." 

Before the allegations became public, a source close to Franco told ET that the 39-year-old actor felt as though he was "on top of the world" with awards season just around the corner. The excitement only grew when Franco won Best Actor in a Musical or Comedy at this year's Golden Globes for his portrayal of Tommy Wiseau in The Disaster Artist, a film he also directed and produced. Then it all came crashing down; the allegations came immediately after.

"He's not in a good place," the source said. "They're watching him around the clock. He's really struggling." Franco was also notably left off of the Best Actor Academy Award race.