The game industry annus horribilis continued today with an announcement from Elite Dangerous studio Frontier Developments, which said that it is implementing a hiring freeze, cutting costs, and laying off an unknown number of employees.
"During 2023, Frontier refined its strategy to refocus on its core strengths following a period of disappointing financial performance and more challenging industry conditions," Frontier said. "The Organisational Review announced today will reshape Frontier to deliver on that updated strategic plan more efficiently, return the Company to profit, and create a sustainable foundation for the future.
"The review will deliver enhancements to Frontier's leadership and structure, drive efficiencies across the Company and achieve a reduction in annual operating costs of up to 20%. The cost reductions will be achieved through a recruitment freeze, spending cuts and, unfortunately, redundancies, subject to consultation."
In the UK, employees being laid off are legally entitled to a "consultation" with their employers about why they're being laid off, whether there are any alternatives to being let go, and what sort of support will be offered, such as retraining, once their employment is terminated. Process specifics vary depending on the size of the company in question and the number of people being let go, and while it generally doesn't protect employees from being laid off, the putative overall goal is to ensure clarity, avoid unpleasant surprises, and in theory at least, make the landing as soft as possible for employees put out of work.
In its 2023 annual report, Frontier said that its previous fiscal year, which ended on May 31, was "challenging," due to "a lower-than-expected sales contribution from F1 Manager 2022, the general sales underperformance across the portfolio during the Christmas holiday period, and the poorer than expected performance of the Foundry games." Foundry was Frontier's third-party publishing division, which was shut down in June following "disappointing" financial performance: Frontier said at the time that Foundry "has not delivered Frontier's expectations of a positive return on investment within the first year of each title."
2023 has truly been a miserable year for game developers, as layoffs have swept across the industry at a deeply upsetting pace and scale. Frontier Developments is the latest in a long line of game developers that have cut staff in 2023, following Epic Games, Electronic Arts, Activision, CD Projekt, Take-Two, BioWare, Firaxis, and numerous others. Large tech companies including Meta, Microsoft, Amazon, Unity, and Google have also cut their workforces dramatically in their never-ending quest for profits and growth.
The organizational review announced today is expected to conclude in early 2024. Frontier didn't say how many employees will be put out of work as a result, but I've reached out for more information and will update if I receive a reply.
