Industry Layoffs Are Destroying Gaming and It Needs to Stop

Layoffs and redundancies are increasingly becoming a part and parcel of employment in any industry. Be it construction or IT, if you’ve ever been laid off before, chances are you’re familiar with the term 'restructuring'. Throughout 2013, this word echoed off the walls of many of the empty offices in the video game industry, which witnessed quite a few high profile closures. But one of the most notable differences between the video games industry and other industries is a progressively high use of what many call the 'hire and fire' model, and it is this very practice that can actually harm the industry more than we can imagine.

Last year, three college friends-turned game developers came up with the idea of tracking layoffs in the industry. For this purpose, Holden Link, Austin Walterman and Cory Johnson came up with a website that offers a compilation of all kinds of closures and job losses across companies in the US and abroad. The total number of layoffs in 2013 stood at 3423+, bearing in mind the possibility of errors stemming from unreported cases or inaccurate numbers. Still, that’s 3000+ people possibly sitting jobless.


We cannot fault a company for wanting to restructure, but I don’t think people would be awfully happy when trying their luck with an employer that decides to lay people off without warning immediately after releasing a video game. That’s exactly what Lionhead Studios did when it laid off 10% of its workforce right after the release of Fable: The Journey. This is bad practice for two main reasons. Firstly, employees lose faith in a company that has the tendency to get rid of people at the drop of a hat. Secondly, if employees fear that they face redundancy, there’s a high chance that their loyalty and commitment to work will decline. This, of course, does not count those looking for temporary work or those looking to gain some experience to add to their portfolios.

It seems that many companies in the industry are leaning towards hiring people for specific projects. I have no problem with a company that makes this known at the time of hiring since there’s nothing wrong with that, but to drop the proverbial hammer unexpectedly, and not being transparent enough before taking people on board is, quite frankly, unethical. We must remember that those working in the video game industry aren’t only doing so out of passion. People do expect a degree of job security and the monetary compensation that comes with it. We aren't just talking about your average laymen or professionals who can simply brush up their skills and find a job elsewhere. We're also talking about talented people with a creative flair. If a company thinks that they can fire such people and re-hire when the need arises, they might be in for a surprise. Creativity cannot be learned like a skill so it's quite possible that the industry is losing talent.

Indeed not every single instance of a company going through layoffs can be blamed on recession or economic factors. The truth is, quite a lot of companies allow their budgets to spiral out of control, resulting in the inevitable need to implement spending cuts. Unfortunately, this includes staff salaries. Now-a-days, AAA games have budgets of millions attached to them, but not all companies can replicate the success of games like Rockstar’s Grand Theft Auto V. In fact, AAA games can sell millions of copies but still be considered failures by the developer. Consider the case of Square Enix’s 2013 installment of Lara Croft: Tomb Raider. Despite the game selling millions within months, it failed to meet Square Enix’s expectations and was labeled a disappointment. Massive budgets and unrealistic expectations are the only plausible explanations for this.


I have also noticed that when it comes to annual franchises, companies seem to rush to recruit people to deal with the extra work, ignoring the threat of franchise fatigue. When sales fall below expectations, the need to lose staff becomes imminent. Many would argue that this is just the nature of the work, but I disagree to an extent. Better planning of resources and utilization of existing resources could prevent developers and studios from binge-hiring. We’re all too familiar with the idea of someone with a six-figure salary making a series of wrong decisions and those further down in the hierarchy feeling the brunt. Companies are conveniently forgetting that a shoddy job done by temporary recruits or inexperienced interns cannot always sell a game with a $60 price tag in the market.

I’m not declaring doom and gloom; I stress upon the right of a company to undergo restructuring or transitioning when the need arises. However, routine layoffs can be avoided. The first thing any company needs to be doing is planning its resources with the future in mind. It's a mistake to take people on board without establishing a clear direction for the future. Secondly, the management needs to let people know at the time of hiring that they're only being hired until the project is completed. Last but not least, companies that choose to hire temporary staff should offer incentives to ensure a high quality of work and motivation among staff. This will certainly help in avoiding mishaps like Aliens: Colonial Marines.

Zarmena Khan
Zarmena Khan

Contributing Writer
Date: 01/15/2014

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