Gaming Scandals: Mass Layoffs of the Past 12 Months

You’ve got a grueling deadline and an 80-hour work week ahead of you — but who knows if you’ll even have the job tomorrow?

For the past year, through scandal after scandal, we’ve found out how hard the life of a game developer really is. Whether it be the lack of job security, the relentless working hours, or even some accusations of sexual assault, the biggest names in the industry certainly have a lot to answer for. How have they gotten away with this? Who do the workers have to stand up for them?

With BioWare, Activision, EA and many more thrown into the mix, it’s harder to name a triple-A company who hasn’t been named in one of the numerous news stories of the past year. So let’s take a step back and take a look at the biggest gaming scandals of the past 12 months.

This week, we’re kicking it off with the one that got the ball rolling: mass layoffs. Let’s start with the shocking closure of a beloved industry darling.

September 2018: Telltale Games

The Wolf Among Us 4

Nobody saw this one coming, not even the staff.

Telltale, with its genre-defining interactive story games, seemed to always have a release around the corner. This gave off an impression of a flourishing developer, and why wouldn’t it? Hits such as The Wolf Among Us and The Walking Dead — both of which had their sequels in the works at the time of the closure — likely make it on some players’ top 10 lists. So what went wrong?

Come September 21, 2018, we woke up to news that over 200 staff members had lost their jobs, leaving nothing aside from a 25-strong skeleton crew to finish off the remaining projects. Sources who spoke to Kotaku said they were hit with bombshell and after bombshell that morning: the company’s closure, their health benefits expiring in nine days, and no severance pay. Oh, and they had 30 minutes to exit the office.

The initial layoffs and later closure were caused by continuous financial woes. Speaking to Variety, co-founder Dan Connors said, “Unfortunately, when the last potential financial backer abruptly pulled out, we were left in a position where we had no choice but to stop production.” That’s understandable, but why don’t the workers get a heads up?

To make matters worse, fast forward just a month later, and Telltale wasn’t able to keep the lights on for the handful who remained, according to Lead Narrative Designer Rachel Noel.

Noel confirmed that some remained, clarifying, “There are still good people at the company. MY team is done.”

The priorities of the company were then brought into question in October, when it came to light that Telltale secured a deal to get the final season of The Walking Dead finished, with some feeling as if their efforts should have been spent on providing severance pay to those who were now out of a job.

As of writing, no ex-employees who suddenly lost their job that day have received severance. A class-action lawsuit was launched by ex-employee Vern Roberts, and it goes after Telltale for allegedly breaking labor laws by not issuing a 60-day notice of the closure. Yet in Telltale’s defense, a clause in this law allows an exception for “business circumstances that were not reasonably foreseeable.”

February 2019: Activision Blizzard

Overwatch Tracer 1

At least with Telltale, it made sense: There wasn’t enough money. Now imagine the confusion when Activision Blizzard went from reporting record-breaking profits for the 2018 fiscal year, to laying off over 800 employees — a shocking 8% of its entire workforce.

Its $7.5 billion in the bank was an increase of more than $1 billion from 2017, so why did so many people lose their job? Well, despite smashing records the previous year, this seemed to fall below management’s expectations, due to drops in the sale of Overwatch loot boxes . Perhaps this is due to the breakout success of Fortnite, with its similar microtransactions model.

“While our financial results for 2018 were the best in our history, we didn’t realize our full potential,” claimed CEO Bobby Kotick, to much confusion.

The decision affected the non-development side of the company, such as its esports workers, QA and IT, according to a Kotaku report featuring statements from Blizzard employees.

In the fallout, Kotick found himself an unpopular man, especially considering his own $1.75 million salary, at a time when over 800 employees were facing the prospect of losing their income and health care. Alongside Telltale, this incident kickstarted the unionizing movement in the game industry, with Game Workers Unite claiming that they “have good grounds for suspecting a breach of labour law surrounding these layoffs,” citing suspicions that they were done to “satisfy shareholders.”

Unlike Telltale however, it is worth mentioning that those who lost their jobs were indeed provided with 60 days’ pay and a severance package, as to comply with The Worker Adjustment and Retraining Notification (WARN) Act.

Activision Blizzard claimed at the time the cuts were necessary to prioritize development jobs in their big titles — Call of Duty and Hearthstone for example — and it seems to be working, with profits above predictions for the first 2019 quarter. On the other hand, it seems this approach did nothing for morale, with sources suggesting several high profile employees are set to leave the company in the next few weeks.

And is it really right to drop 800 people for the sake of a few extra dollars, when you’re already smashing records?

February 2019: ArenaNet

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We still don’t know the full extent of this one, and it seems the parent company, NCSoft West, want to keep it under wraps. What we do know is that, according to a source speaking to Kotaku, employees of ArenaNet, the company behind Guild Wars, received an email from NCSoft CEO Songyee Yoon, speaking of her disappointment in delays on mobile titles, not helped by an increase in operation cost.

In short, the issue appeared to be too many projects, not enough releases. The secrecy continued, and to this day, figures can only be estimated from tweets by employees.

Given the emotive testimonies under the hashtag #Love4ArenaNet, it’s safe to assume that whatever the number was, the layoffs were a huge blow to the then-400-strong studio.

February 2019: Electronic Arts

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Smaller than the rest of the layoffs in the list, but for a 200-strong development studio, losing an estimated 50 employees in one day is a huge blow. FireMonkeys is an Australian based EA studio, having been acquired by the publishing titan back in 2012. As for the reasoning behind it, it appears the studio fell victim to the rise of the “live service” model of gaming, as EA claimed in a statement that this is where they wanted to take FireMonkeys going forward.

Having just lost a quarter of its workforce, an anonymous employee spoke to Kotaku Australia, claiming that remaining staff don’t expect the studio to last much longer, since they have “no idea how certain tasks will be done at all” following the loss.

Game Workers Unite Australia rejected EA’s statement, issuing its own to call for more game workers joining unions.

“EA is profitable, but simply not ‘profitable enough’ to keep its executive board and shareholders happy,” the union wrote. “And now the people at FireMonkeys have to pay the price for that.”

March 2019: Electronic Arts (again)


EA is no stranger to a round of layoffs, usually in the form of a studio closure. On March 26, an email from CEO Andrew Wilson was obtained by Kotaku, setting out what he described as plans to become “the World’s Greatest Games Company,” admitting that “If we’re honest with ourselves, we’re not there right now.”

The company restructure saw around 350 of 9,000 employees out of work, predominately from publishing and marketing departments. Curiously, despite saying in a statement that EA were simply “ramping down” their current presence in Japan and Russia, in reality, the offices for these countries were shut down completely.

Just how does this play into EA becoming the “greatest games company”? Well, that wasn’t entirely clear. In a statement, Wilson simply said that the company is making “deliberate moves to better deliver on [its] commitments, refine [its] organization and meet the needs of [its] players.” Translating that from press release speak, it’s likely cutting costs following the rise in EA’s arch-nemesis: the loot crate controversy. Not only does the risk of bans on loot crates in games (as seen in Belgium) threaten their microtransaction profits, but the overall distaste for the system in the gaming community means gamers are less likely to pick up a title that includes them.

So with Battlefront 2 and Anthem, the back-to-back disappointments, the company wasn’t left with much pride and accomplishment, and unfortunately, it was those in marketing who had to bear the brunt of it.

June 2019: Starbreeze Studios

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This one snuck up on us as I was writing this article. After months of worry, Swedish development and publishing studio Starbreeze revealed plans to cut its 240-person workforce down by 60, in what it describes as plans to “make the organization more efficient and reduce costs.”

Starbreeze’s woes began in December with CEO Bo Andersson Klint’s departure plunging the company into a “reconstruction” period — a procedure in Sweden in which a company is allowed to to reorganize to avoid insolvency. The company’s latest publishing venture, Overkill’s The Walking Dead, garnered mediocre reception both critically and commercially.

Fast forward to early June, and the reconstruction period has already been extended twice. As much as Starbreeze’s statement says that this is all part of a “long-term” plan, it can’t help but seem like a last ditch attempt to keep the ailing company going, since it waited so long into the restructuring to resort to layoffs.

So will this work? Well, according to its own interim report last month, probably not. “The company currently lacks sufficient secured funds to continue operating for the coming 12 months,” the report states. The company later goes on to admit that liquidation is “expected” without this investment. Perhaps the prospect of less employees to pay will bring in the investors, but if not, Starbreeze seems likely to go the way of Telltale, losing everything after putting all its bets on an extra injection of money that never comes.

At the very least, Starbreeze were granted yet another extension to the reconstruction period, giving them until Sept. 3 to find the money.

Game Workers Unite Sweden were contacted for comment regarding these massive layoffs, but did not respond.

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