WASHINGTON, DC (BBN) — On Monday January 8th, Unity, a software company famous for its proprietary game engine, laid off over 1,800 employees, almost 25% of its total workforce. This is in addition to the 265 employees let go in November of 2023, raising the total percentage of firings in the last two months to nearly 30% of its original workforce.

The reduction in staff was largely due to a particularly reckless decision from the leadership at the company to change its revenue split which made them popular among educational institutions and small scale video game developers.

[Microsoft President and Vice Chairman Brad Smith speaks to Capitol Intelligence/BBN using CI Glass on its $70 billion takeover of Activision under antitrust scrutiny by the US Federal Trade Commission (FTC), UK’s Competition and Markets Authority (CMA) and the European Commission at the National Governors Association Winter Meeting in Washington DC on February 11, 2023]

The most controversial changes would charge developers based on the amount their game was individually installed–regardless of the source (free access, piracy, reinstalls). The infamous CEO John Riccatello, previously scorned CEO of EA, “retired” from the company as he was responsible for destroying the goodwill the company had built over several years.

Yet the other members of the board, who at best were complicit in manufacturing this cataclysmic situation,  still retain their positions with no public scrutiny. Instead, nearly a third of the workers had to lose their employment.

Almost simultaneously, Amazon, a company which hosts many jobs in the entertainment industry, purged thousands of jobs in the same week from its Twitch offices.

Whilst Prime and MGM also lost many workers, the precise number of those furloughed remains unreported, though estimates range in the hundreds. Twitch, the online live-streaming service focused on personalities in gaming, let go of more than 500 employees.

This was a third of their entire workforce, let go without warning and discovered the news from instead of their employers. This was again compounded by 400 employees who were fired from the platform in the previous year and shuttering all operations in one of the biggest markets, South Korea (there is a lack of net neutrality infrastructure, resulting in exorbitant ISP fees).

Twitch is still the largest personal live broadcasting site on the internet, but after losing 45% of its workforce in the last year many users and consumers are weary about the website’s future.

[Amazon and Washington Post owner Jeff Bezos speaks to Capitol Intelligence using CI Glass (google glass) at the National Press Club. Washington, DC. September 17, 2014]

While Twitch does not produce video games, it is responsible for more sales of video games than many marketing campaigns could hope to reach. Twitch as an entity is understood to be an invaluable part of the industry, yet the workers who keep it running are treated as livestock.

Bungie, a famous software developer recently purchased in its entirety by Sony for the sum of $3.6 billion, fired several staff members during November 2023. The first to feel the fire were the QA testers (leadership referred to the testers often as “not developers”) lost 10% of their ranks.

Many former employees speculate the company will rely more on outsourced and temporary contract laborers from secondary studios.

This was one section of the 100 staffers let go during this timeframe, an estimated 8% of the total workforce which included veteran staff members in key departments such as accessibility who also spearheaded DEI initiatives, community managers who were nominated for their work at The Game Awards, and the music department who let go of Micheal Salvatori the legendary composer who created all of the music for Destiny franchise along with the iconic theme for the Halo franchise.

This only worsened as the January weeks passed when Activision Blizzard, now under the banner of Microsoft after one of the largest acquisitions of all time, now possibly holds the record for mass layoffs.

In one fell swoop, 8% of the 22,000 members of Bungie’s staff were unceremoniously ousted. For those not wanting to do the math, that is over 1,900 employees left without proper plans to secure the future.

Many suspect the reason for this surprising change was due to a restructuring of the executives who wish to prioritize integrating AI into production. The exodus of talent also caused now ex-CEO Mike Ybarra and ex-Chief Design Officer Allen Adham to leave as well. This has created a power vacuum which will negatively impact the direction of all projects moving forward as a six year project has already been canceled.

These layoffs do not even cover the full scope of companies affected as Discord, Riot, and dozens of developers purchased by Embracer Group have been affected by these sudden callous decisions.

It would be naive to believe layoffs can never occur as they are at times a natural part of business.

Sometimes they are the result of reasonable changes in corporate priorities or preventing an unsustainable future. But the trend of layoffs and many of their causes in the gaming industry discourages monumentally talented individuals from passing their talent on to the next generation.

Though consumers may find it difficult to empathize or not understand the implications of these changes as it causes many projects to get the ax, force studios to shelve creating their own IP, and creates unstable work environments with low morale. When consumers wonder why so many games feel soulless, the unseen and underlying reasons written here are often the cause.

2023 was a year that saw the most labor action in the US since 2000. The UAW, WGA, SAG-AFTRA, APFA, health care workers, and the Teamsters collectively had half a million workers conduct 400 different strikes across the nation.

[AFL CIO Director of Policy and Special Counsel Damon A. Silvers speaks to Capitol Intelligence/BBN using CI Glass on mega-merger at the National Press Club]

Investopedia predicts this trend will continue into 2024 as worker contracts for several large corporations like AT&T and Boeing expire this year.

Unfortunately, I feel the games industry will not be quick to adopt many of the same trends seen in other large industries. 2023 was a landmark year for game releases with critical smash hits such as Baldur’s Gate III, Alan Wake II; however, it has accumulated the most furloughed talent ever seen in the industry.

Over 9,000 jobs have been lost across all major publishers in the last year; we’ve lost 6,100 in the last month. Any hopes this trend would stymie in the new year were quickly dashed as company layoffs are only a third away from last year’s annual record.

Regardless of the industry, workers need stability in order to make the industry as a whole stronger. If the churn rate of workers continues at all levels, it will cause an industry wide dearth of talent which can have all sorts of unpredictable consequences.

For conditions to improve, the workers must be able to bargain for PTO, fair raises, and substantial benefits. Unionization must be an industry-wide standard so companies may not feel emboldened to furlough employees with no prior notice and no benefits to provide a safety net.

Avalanche Studios, Paizo, Raven Software, CD Projeckt Red, and others have laid the foundations for how studios may accomplish this on their own. It now is in the hands of the workers of the industry to make them a standard and not merely an exception.

By Keith Alexander Turnage and edited by PK Semler  in Washington, DC.  For more information, please email pks@capitolintelgroup.com