Another week, another layoff news. This time, it is coming from Supermassive Games, the developer that has distinguished itself in the horror genre with titles like Until Dawn and the upcoming Little Nightmares 3.
“The game industry remains a challenging and ever-evolving environment,” the studio announced in an official statement. “As we adapt our team structure to better align with these changes, we’ve had to make the very difficult decision to begin a redundancy consultation process where we anticipate losing up to 36 of our colleagues.”
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“This decision was not taken lightly, and we know this will be an incredibly difficult time for everyone. Our absolute priority will be to offer full support to all those affected.”
Besides Little Nightmares 3, Supermassive Games is also working on Directive 8020. The studio confirmed that the launch date has now been moved to the first half of 2026, while adding that “the response to the game so far has been fantastic”.
According to Supermassive Games, the shift in the date for Directive 8020 will give them additional time to “deliver the very best experience for our fans”. The layoffs will not impact Little Nightmares 3, which now has an October 10 release date.
Supermassive Games laid off around 30% of its staff at the beginning of last year. In April 2025, it was reported that the developer had canceled an unannounced Blade Runner game.
Although the frequency of layoffs in the gaming industry has declined compared to 2023, significant cuts still happen every now and then, with Microsoft being behind some of the largest single-day cuts.
Every layoff announcement either mentions restructuring or evolving game development. However, those are often nice words used to mask the fact that most studios are increasingly adopting the use of AI tools in game development, which has enabled them to cut headcount.
