2025 Wasn't a Recovery. It Was the Eye of the Storm
Is AI the cover story for these layoffs?
For a brief, hopeful stretch, it seemed the worst might be over. After 2024's catastrophic 15,631 games-industry layoffs, 2025 came in at around 9,197, a steep enough drop that analysts, including the people who tracks this most closely, cautiously projected continued improvement into 2026. That optimism has now collapsed. The ASGC Games Industry Layoffs Tracker, maintained by Tencent Games , currently projects 14,259 layoffs for 2026, a figure that would nearly match 2024's record and confirm that last year's dip was never a recovery at all. It was a pause between waves.
The trajectory of the forecast itself tells the story better than any single number. Back on January 6, Satvat projected 8,025 layoffs for the year, roughly in line with the improving trend. That estimate has since been revised upward again and again, climbing 78% to its current projection, with confirmed layoffs already sitting at 9,781 through July 26 and two full quarters still to run. Satvat has been blunt that "the pace of layoffs is accelerating faster than our models initially predicted," which is a striking admission from someone whose forecasts hit 93% accuracy for 2025. When the person best equipped to model this is repeatedly caught out to the downside, it tells you the industry isn't following the gentle post-peak decline everyone hoped for. It's snapped back to near-record pace.
Why the 2025 "Improvement" Was a Mirage
Here's the context that recasts last year entirely, and it's the part that should trouble anyone who took comfort in that 9,197 figure. Over the four years from 2022 to 2026, the global games industry's total headcount grew by a grand total of 0.6%. Not 6%. Not 16%. Roughly four thousand net jobs across an industry of some 754,000 people, over four years. During that same window, the industry hired around 52,500 people while more than 48,000 lost their jobs. So the churn was enormous, but the net movement was almost nothing, which means 2025's quieter year didn't represent healing. It represented a brief lull in a grinding, continuous churn that has kept the workforce essentially flat while chewing through tens of thousands of careers. The cumulative five-year toll now sits near 58,000 layoffs, and climbing.
That flatness matters more than the peaks and troughs, because of what it does to the pipeline. When an industry grows 25% to 50% every five years, as gaming did in the period before 2022, it absorbs new entrants naturally. Graduates get hired, laid-off veterans find new roles, the funnel clears. At 0.6% growth, the funnel backs up completely. Satvat's data suggests roughly 288,000 people were actively seeking work in the industry across this period, including around 225,000 recent graduates competing for a number of new roles that had dwindled to almost nothing. So even in a "better" year like 2025, there was no real relief for the people cut, because there was nowhere for them to go. The improvement was in the layoff headline, not in the lived reality of the workforce.
The Cuts Behind the Curve
The reason 2026 has blown past its forecast isn't mysterious. It's the drumbeat of individual events we've covered all year, each feeding the total. Microsoft's Xbox restructuring alone accounts for an enormous share, with the first wave hitting 1,600 workers across Obsidian, Bethesda, id Software, and ZeniMax Online, and another 1,600 still to land. Layer on the steady stream of smaller cuts, 32 at ZA/UM following Zero Parades, 20 at 11 Bit Studios, 51 at Ubisoft Barcelona, 22 at Red Rover Interactive, and the total climbs relentlessly, at a rate of roughly 0.7 layoff events per working day. The pain remains overwhelmingly concentrated in the West, with North America accounting for 66% of layoff events and 79% of affected workers, the US alone at 48% and Canada at 17%, while Europe makes up 30%. Combined, North America and Europe represent 95% of all games-industry layoffs, and North America's regional workforce has shrunk by 11.5% over the four-year span even as the global figure barely moved.
The Wildcard, and the Warning
There's real uncertainty baked into the 14,259 figure, and it hinges largely on one company. Satvat has flagged that the timing of Microsoft's remaining 1,600 cuts is unclear, noting "some could fall in the back half of FY27, during calendar 2027," and that he currently assumes all will land in 2026 while remaining ready to revise.
The comforting story that the industry was stabilising has not survived contact with the data. What the numbers actually describe is a sector that has spent five years cutting nearly as fast as it hires, flat on net, with no growth to absorb the fallout, and no clear sign of when, or whether, that pattern breaks. Last year wasn't the recovery. On the evidence so far, it was the calm.
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