The gaming industry has been in the news for the past few years as a result of the wave of layoffs sweeping across companies, and the trend shows no signs of slowing down anytime soon. The latest "State of the Game Industry Report" released by the Game Developers Conference (GDC) shows that among 2,300 industry professionals surveyed, 33% of U.S. respondents have been affected by layoffs in the past two years.
The situation for employees in other countries is not optimistic either. 28% of respondents have been laid off in the past two years, and 17% said they have been affected by layoffs in the past year. The report pointed out that the actual number of affected people may be higher because it does not take into account multiple layoffs of the same employees.
Among those who experienced layoffs, 48% said they were still looking for work, and 36% said their efforts to stay in the gaming industry had not yet yielded tangible results.
The report also covers 450 respondents who experienced studio closures, mergers or acquisitions in some form in the past year. It is worth noting that about 31% of laid off employees do not know the specific reasons. At the same time, respondents from AAA studios and mature independent teams more often confirmed that they had experienced acquisitions, while those from newer studios were more likely to experience direct closure.
The reasons behind the layoffs have been attributed to a variety of factors. 43% of the respondents believed that the company's internal restructuring led to layoffs, and 32% said that project cancellation was the main reason for their unemployment. One interviewee criticized company management for failing to recognize that the industry-wide boom during the pandemic was not permanent.
“Management failed to see that the explosive growth during the epidemic was unsustainable, and the company was frantically making acquisitions before being acquired,” the interviewee told GDC. “Funds are much tighter now because the ‘goldfish’ who control the funds want to see returns yesterday so they can invest money in the current trend (generative AI).”
Another interviewee put it bluntly: "Executives who have never really been developers are ripping the planks out of their own boats, throwing employees overboard, and counting on these scuttled ghost ships to continue to make them unlimited money."
Industry unions in Europe are wary of the possibility of further layoffs, especially in the context of Ubisoft's recent announcement of organizational restructuring and "voluntary negotiated separation plans." With cost cuts already part of the company's plans, French unions Solidaires Informatique, STJV and CFE CGC have called on Ubisoft Paris employees to strike if CEO Yves Guillermotte visits the studio as planned on February 3.