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The video game industry continues to face an unrelenting wave of layoffs, with December 2025 marking yet another difficult chapter. Estimates suggest more than 5,300 jobs have been lost this year, with projections rising toward nearly 10,000 by year’s end. Smaller studios are battling for survival while larger publishers scale back projects and restructure under financial pressure. Here’s a breakdown of the latest developments impacting teams across the industry.
Eidos-Montréal Faces Second Round of Cuts This Year
Eidos-Montréal, the Embracer Group–owned studio behind Deus Ex and Marvel’s Guardians of the Galaxy, has laid off at least 12 employees in early December—its second round of cuts this year following 75 layoffs in March. This follows an additional 97 layoffs in January 2024 as part of Embracer’s broader restructuring efforts.
The studio is reportedly shifting focus toward external support roles on Xbox projects such as Fable and Grounded 2. Earlier in the year, multiple internal projects were cancelled, including a rumored Legacy of Kain reboot, a new Deus Ex entry, and an R&D initiative linked to Lord of the Rings. Recent reports indicate that the latest cuts are tied to the winding down of a single project expected to reach beta in 2026, rather than a full internal shutdown.
Three Fields Entertainment Places Entire Team on Redundancy Notice
UK-based Three Fields Entertainment—founded by former Burnout developers and creators of Wreckreation—has placed its entire staff on redundancy notice as of December 3. According to CEO Fiona Sperry, the situation stems from publisher THQ Nordic withdrawing post-launch funding and offering limited support, leaving the studio to self-fund without receiving any share of sales revenue. After 12 years in operation, the team hopes increased visibility may help attract a buyer for its future projects.
Other Major Cuts: Firaxis, UK Studios, and More
- Firaxis Games: The Civilization developer confirmed that dozens of staff have been laid off during a restructuring effort designed to “optimize development.”
- UK Studios Impacted: More than 400 workers across the UK are at risk ahead of the holiday season. Coatsink cut over 60 staff on November 24, while Splash Damage, Glowmade, and Square Enix London are also affected, according to union reports.
- Outright Games: The family-focused publisher has laid off 27 staff members amid shifting market conditions.
These developments contribute to a broader trend of reductions across the tech and gaming sectors, with hundreds of mass layoffs recorded globally throughout 2025. Worker unions continue urging developers to organise in response to what many are calling an “avalanche” of job losses.
What Lies Ahead?
With The Game Awards approaching on December 12, the industry anticipates a wave of announcements and strategic changes. While publishers frame these cuts as necessary restructuring, the human cost continues to rise. Independent studios remain resilient, but the loss of experienced talent risks slowing creativity and innovation across the industry.
More updates are expected as cost-cutting measures continue to ripple throughout the gaming world.