The video game industry has been seeing mass layoffs since 2022, and with each passing year, the situation hasn’t improved. According to the 2026 State of the Game Industry report by GDC (Game Developer Conference), 33% of US professionals involved with the game industry were laid off in the past 24 months.
As the report points out, many analysts were expecting the number of layoffs to decrease in 2025. If you follow the industry closely, you know that’s not how it went. In fact, GDC points out that layoffs only got worse. 1-in-4 employees were laid off in the past two years, and game designers (often the architects behind games) saw the worst of it. 20% of game designers were laid off in the past 12 months alone. With conditions like this, no wonder unions are announcing strikes.
How Layoffs Affect The Industry
A crucial point raised in GDC’s report is that nearly 50% of people who were fired haven’t found a new job yet. All this data was collected across 2300+ respondents, and more than half of them said their companies experienced layoffs in the past year. It’s also important to note that after acquisitions, closures, or mergers, these firings grew further.
Nearly half of the respondents say that they expect future dismissals from their companies in the coming year. AAA studios are the worst offenders here, as only one-third of indie developers confirmed layoffs at their studios. Here’s a quote from an anonymous game designer from California:
“I’ve been laid off so many times in the last 5-6 years, had so many turbulent issues working in games. I have trauma and can’t ever fully trust anywhere now.”
Of course, this is scaring away future developers. 74% of surveyed students feel very concerned about job opportunities in the industry. One of the reasons we’re seeing these layoffs is because of the COVID-era boom. With people having more time, the games industry thrived from 2020 to 2021. Executives wanted to capitalize on this, and they hired way too many people for projects that were too ambitious. Microsoft was at the center of this, as it was revealed last year that its “unrealistic profit demands” were the leading cause behind studio closures.
