Avalanche Studios, known for creating games like Just Cause and Mad Max, recently made a significant announcement regarding the layoff of 50 developers, which accounts for nine percent of their global workforce. In addition to the layoffs, the company also revealed the closure of their studios in New York, USA and Montreal, Canada. This decision was made in order to ensure a “stable and sustainable future” for the company.
Avalanche Studios’ Montreal studio, which was only operational for eight months, was founded in 2023 when Avalanche acquired and integrated Monster Closet. On the other hand, the New York studio has been in existence since 2011. Avalanche Studios as a whole celebrated its 20th anniversary in 2023. Their current projects include Contraband for Xbox Game Studios, an open-world co-op game centered on smugglers and vehicular combat set in the fictional Southeast Asian region of Bayan in the 1970s.
The recent unionisation agreement for Avalanche staff in Sweden, where the company entered into a collective bargaining agreement with labour organisations, has also been a significant development. The agreement aims to standardise areas such as salaries, benefits, employee influence, and career support. However, it remains unclear how this agreement correlates with the decision to close the New York and Montreal offices.
The layoffs at Avalanche Studios are part of a larger trend in the gaming industry, where mass layoffs have become common over the past year or two. Industry analysts attribute this trend to factors such as overambitious expansion during the lockdown gaming boom, failed technological innovations like NFTs, economic instability, and the rising costs of developing blockbuster video games. While some companies, like Microsoft, have resorted to large-scale layoffs after major acquisitions, others, like Avalanche Studios, have faced challenges due to economic hardships.
The recent layoffs at Avalanche Studios and the closure of their New York and Montreal offices signify a challenging time for the company and its employees. The impact of these decisions on the gaming industry as a whole remains to be seen, but it underscores the volatility and uncertainty that developers and studios face in an ever-evolving landscape. As the industry continues to grapple with economic pressures and changing trends, companies like Avalanche Studios must navigate carefully to ensure a sustainable future while supporting their employees through difficult transitions.
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