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Just Cause creators, Mad Max developers and Rage 2 co-developers Avalanche Studios have announced that they will lay off 50 developers – nine per cent of their global workforce – and close their New York, USA and Montreal, Canada studios in order to “ensure a stable and sustainable future for the company”.
The announcement post doesn’t go into much detail about either the reasons for the layoffs or how exactly Avalanche will be supporting the departing staff, adding only that “our focus is now on supporting all Avalanchers through this challenging time” and that “we’re grateful for the invaluable contributions of those leaving and remain committed to creating incredible gaming experiences for our players.”
Avalanche’s Montreal studio had been open for all of eight months. The studio was founded in October 2023 after Avalanche acquired and integrated Monster Closet, who were themselves founded in 2021 by former developers of such headliners as Halo, Prince of Persia and Assassin’s Creed. Avalanche’s New York studio, meanwhile, dates back to 2011.
Avalanche as a whole turned 20 in 2023. Their current projects include Contraband for Xbox Game Studios – an open world co-op game about smugglers with a focus on vehicular battling, set in the fictional Southeast Asian region of Bayan in the 1970s.
The layoffs follow hard on the heels of a unionisation agreement for Avalanche staff in Sweden. In April, Avalanche entered into a collective bargaining agreement with Swedish labour organisations Unionen and Engineers of Sweden, with a view to “[standardising] frameworks around essential areas such as salaries, benefits, employee influence and career support”. The deal will take effect in 2025, and Swedish Avalanche workers are now in the process of hashing out the specifics with management. It’s not clear how, if at all, this relates to the decision to shutter the New York and Montreal offices.
The studio closures fit a larger pattern of games industry mass layoffs over the past year or two that have been widely attributed to a mixture of “overambitious” expansion during the lockdown gaming boom, technological innovations/gimmicks such as NFTs not paying off, general economic upheaval, and a desire for returns on investment that are increasingly hard to square with the sheer expense of developing a blockbuster videogame.
That’s a very compressed summary that doesn’t take into account how circumstances may vary between studios – Avalanche are not Microsoft, for example, who started the year by laying off almost 2000 people after spending $68.7 billion on the acquisition of Activision Blizzard. As Alice B wrote at the time, “shrinking headcount is often one of the first things a business does when it has eaten a smaller, weaker one.”
You can read more about the gutting of the games industry in my feature from this year’s GDC.