CD Projekt RED, the Polish video game developer responsible for hits like Cyberpunk 2077 and "The Witcher" saga, has announced plans to lay off approximately 9% of its workforce, Reuters reports.
The decision comes as the company seeks to create more "agile" and "effective" teams, aligning with its commitment to delivering top-tier role-playing games while minimizing employee burnout.
Overstaffed Game Studio
CEO Adam Kicinski revealed the news in an organizational update, emphasizing the necessity of building teams tailored to specific project needs.
"We've carefully assessed all teams in the company in terms of their expected contribution to the delivery of our strategy," Kicinski stated, adding, "There's no easy way to say this, but today we are overstaffed."
The Polish gaming giant plans to part ways with about 100 employees, equating to roughly 9% of the entire team. However, the process will be gradual, and some impacted individuals will continue their roles until Q1 2024.
In a gesture of transparency, CD Projekt RED is offering a comprehensive severance package to the affected employees to aid their transition into new opportunities.
What's Next?
VGC reports that CD Projekt RED currently has an array of exciting projects on the horizon, including Polaris, a new installment in "The Witcher" franchise, Orion, a fresh Cyberpunk game, and Hadar, an ambitious new IP.
This workforce reduction news arrives as CD Projekt RED gears up for the premiere of "Phantom Liberty," the highly-anticipated expansion to their groundbreaking title, Cyberpunk 2077, scheduled for late September.
Reuters notes that industry analysts, including J.P. Morgan, have labeled the move as understandable in light of strong wage inflation for developers and the expected drop in activity post the expansion's release.
While the positive earnings from the expansion are expected to mitigate the financial impact of severance costs in the third quarter, some investors may wonder about the impact on the company's long-term stability.
CD Projekt RED's stock experienced a temporary dip of 2.8% on the news, but industry experts suggest that this move is not uncommon in the gaming industry, especially when companies undergo significant strategic shifts.
More Game Studio Layoffs
The decision to reduce staff also reflects a broader trend within Poland's gaming sector. Earlier, Ten Square Games and Huuuuge, two prominent companies in the country's gaming landscape, also announced job cuts as part of their business realignments.
While the decision to trim its workforce may raise eyebrows, CD Projekt RED's track record of producing critically acclaimed titles like "The Witcher 3: Wild Hunt" and "Cyberpunk 2077" demonstrates its capability to navigate internal challenges.
CD Projekt also announced in May that it has fired off 29 staff.
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