What’s with Playtika’s latest round of massive layoffs?

We’re all probably tired of hearing about layoffs by now, but sadly it’s a depressing reality of the current video game industry. Even in companies that are seemingly doing well we’ve seen long-time employees losing their jobs, and for a lot of players the worry is that this is going to have a knock-on effect not just on other creators but also the games themselves.

One of the most recent layoffs, just today, in fact, was from mobile game creator Playtika. The company has laid off around 400 jobs, or about 10% of its workforce, in one fell swoop following another round of layoffs in 2022. You may know Playtika as the force behind developer Wooga,themselves responsible for the hugely successful puzzle and narrative game June’s Journey.

June’s Journey is one of many games that make up Playtika’s overall portfolio and has also been a surprise hit for Wooga. The studio even commissioned its own podcast to expand on the game's narrative lore. But for the layperson watching these layoffs happen in real-time, they may be worrying that even the makers of a highly successful game like this will be at risk.

Should we be worried?

If you’re a big June’s Journey fan, then there's nothing to worry about. Wooga is one of Playtika’s most lucrative subsidiaries and is hugely successful on its own. At the moment, these layoffs are restricted to the main company. However, if there’s anything we’ve seen with other major corporations like Embracer, these layoffs can have a knock-on effect on virtually any studio that could be seen as underperforming.

It's a major change to the behaviour of Playtika. Only a while ago back in 2023, Playtika seemed pretty confident and was even making offers to buy Angry Birds developers Rovio Entertainment. But it seems that things have changed since then…

What’s the implication then, for us as players? Well, at the moment we can’t be sure. For successful games, we can assume they’re just going to keep going. Although Playtika hasn’t been shy about closing down those studios and taking these games on directly as their own, as was the case with Best Fiends developers Seriously who saw their studio shut down only a year before the game received a major marketing push.

Sadly, as it stands, games are more often than not seen as a commodity, with little regard for the studios that have made them. It may be a shrewd business decision - arguably - but it also means that ultimately these titles are taken out of the hands of the players who know them in and out and understand their systems. A lower quality of ongoing service is then most likely inevitable.

The layoffs explained

If you’re wondering why so many companies are making these layoffs, it could be argued that it’s partially due to Covid-19. When these companies had a ‘captive audience’ they expanded massively due to the huge influx of profits when video games became everyone’s go-to choice of entertainment. Unfortunately, nobody seemed to have told them that the good times don’t last forever. So, now, they’re deciding to cut out the people that they hired, or more besides. Add on the disastrous business dealings of companies like Embracer, and sadly it’s the developers who end up getting hit with the backlash.

For now, things are business as usual. But many have been wondering if these cuts to teams that have built up expertise over the years will lead to a crash. In this case, we could see some serious changes in how things work for both players and studios. Whether that means a break-up of the huge studios that have consolidated over the years or independent developers falling prey to a more volatile scenario could dictate how the game industry, and games themselves, develop for the foreseeable future.

What do you think? Do you think this is the last we’ll see of it? Will it change and improve? Have you seen any changes in your favourite games since these layoffs happened?