Not quite two months after Avalanche halted work on its 1970s smuggling sim Contraband, seemingly fallout from the massive wave of layoffs and cancellations imposed by Microsoft earlier in the year, Avalanche has announced the upcoming closure of its studio in Liverpool, and layoffs at its remaining operations.
"In light of current challenges to our business and the industry, we have thoroughly reviewed how to best ensure Avalanche Studio Group's long-term success," the company wrote.
"This review has led us to the difficult conclusion that we must make changes to our staffing and locations. As a result, we are proposing to close our Liverpool studio, and to initiate a collective consultation process, as required by UK law. This will impact all Avalanchers in Liverpool. The changes will also impact our other studio locations in Malmö and Stockholm, where we will reduce our workforce and restructure the teams to address our games' needs."
This will be Avalanche's third studio closure in just over a year: In June 2024 Avalanche closed its offices in Montreal and New York, putting roughly 50 people out of work. A studio representative declined to say how many people are being let go as a result of this latest round of layoffs.
Avalanche has a number of well-known games to its name including the Just Cause series, Mad Max, and Rage 2, but its only in-development project, according to the studio's website, is—or possibly was—Contraband. Announced in 2021 with a brief, vibes-heavy cinematic, Contraband promised a "co-op smuggler’s paradise set in the fictional world of 1970s Bayan."
After that tease, though, the whole thing completely fell off the radar until August, when Avalanche announced that "active development has now stopped while we evaluate the project's future." No mention of Microsoft was made but multiple reports said the call was made by Microsoft as part of its sweeping cuts in July, which saw roughly 9,000 people put out of work, multiple project cancellations, and the closure of Perfect Dark developer The Initiative.
The indirect impact of those cuts have been felt elsewhere, including at Romero Games, which was forced to lay off employees after it lost funding for its new shooter project, and Crystal Dynamics, the co-developer of the cancelled Perfect Dark reboot—and now, apparently, at Avalanche.
After two very ugly years for the videogame industry, which saw thousands of layoffs through 2023 and 2024, PC Gamer's Wes Fenlon teed off 2025 by saying it felt like we were "poised for a vibe shift—or maybe a reckoning." Instead, it's been largely more of the same: Unionization efforts have picked up speed across the industry, but studios of all sizes continue to be hammered by layoffs, even when it seems that things are going well: Xbox boss Phil Spencer had the nerve to say "our platform, hardware, and game roadmap have never looked stronger" while announcing Microsoft's latest massive round of layoffs.
There's still three months later in 2025, but at this point I'm just hoping for better things in 2026. For now, Avalanche said that "despite these changes, we remain deeply committed to providing amazing games to our passionate player communities."
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