Diablo IV support studio hit by layoffs putting 139 people out of work, proving that Embracer's "restructuring" is not over

"Shifting market conditions"

In March, the CEO of Embracer announced that the company's widespread removal of workers across their many owned studios was over. That has turned out to be false, as the megacorp continues to enforce layoffs and close down studios. Now, a support studio for Diablo IV and Tiny Tina's Wonderlands has suffered further layoffs, with over half the employees at the studio losing their jobs.

Last week, a total of 139 workers were laid off, according to a legal notice submitted to Wisconsin state government. The mass layoff notice lists a range of affected workers, from junior VFX artists to senior QA analysts. An executive producer and a creative director are also among the roles hit. The studio had "200+" workers prior to the job cuts, according to its website.

"Today is a challenging day for Lost Boys Interactive as we face the difficult decision to reduce our workforce,” said CEO Shaun Nivens in a LinkedIn post. “Decisions involving staff reductions are never made lightly, and this action was taken only after considering all other options. We are committed to supporting them in every way we can during this transition.”

"As a co-development partner studio, Lost Boys is directly influenced by the projects and priorities of our development clients," the studio statement goes on. The post blames "shifting market conditions" for the "difficult decision".

Lost Boys Interactive is a studio that provides QA and art support, among other expertise, to client developers. In the past they've also worked with Amazon on the frontier MMO New World and on PlayerUnknown's Battlegrounds. Since being acquired by Gearbox (and its respective owners Embracer) in 2022 they've already been dealt one round of job losses in January this year.

An art director who survived those earlier layoffs, Nick Barone, posted his sympathies earlier in the year for those hit. "Yesterday was easily the hardest day of my career," he wrote eight months ago. "Even though I was spared in the company-wide layoff at Lost Boys Interactive, so many talented artists and flat-out fantastic people were let go."

Last week, Barone was also laid off.

"A lot of very talented and amazing people were let go today..." he wrote on LinkedIn. "If any of you wonderful people need any recommendations written or just someone to talk to don't hesitate to reach out... You are all amazing, keep doing what you do and I will miss the wonderful trauma bonding we all did together."

Embracer have gutted various studios over the last couple of years, laying off more than 8% of their global workforce and killing a potential Red Faction sequel while they were at it.

The spate of job axing is partly the hangover from an overzealous mergers and acquisitions binge indulged by Embracer, and reflects a greater climate of mass layoffs that has been hounding the games industry in recent years. Despite the CEO of Embracer telling investors that the task of shitcanning almost 1 in 10 of his employees is over, it is plain to see that this is not the case.