Iron Galaxy Studios, an independent game developer based in Illinois, has announced a new round of layoffs. This marks the second reduction in force for the studio in as many years. The company cited shifts in the gaming industry as the reason for the cuts.
What happened
Iron Galaxy Studios announced a reduction in company size via a LinkedIn post. The studio stated that the layoffs are a step to adapt to the current climate of the video game industry and to evolve the company's structure.
How many employees affected
While the studio's announcement did not specify the exact number of affected employees, reports indicate that up to 90 people could lose their jobs. Iron Galaxy laid off 66 staff in 2025.
Why layoffs happened
Iron Galaxy stated that the gaming industry has seen slowed growth since 2020 and that the company is adapting to what it sees as permanent market conditions. They noted that people are playing games in new ways and publishers have different criteria for allocating resources.
Company background
Iron Galaxy is known as a work-for-hire studio, having contributed to games such as The Lord of the Rings Online, BioShock 2, and various Batman Arkham titles. More recently, they developed the PC editions of The Last of Us Parts I and II. Iron Galaxy also developed Rumbleverse, Killer Instinct Seasons 2 and 3, and Tony Hawk's Pro Skater 3+4.
Industry impact
The layoffs at Iron Galaxy reflect a broader trend of downsizing in the video game industry since the end of the pandemic. Numerous studios have scaled back by canceling games, laying off staff, and closing studios. Funding for new games is also reportedly slowing.
What's next
Iron Galaxy is forming a "new company structure" to adapt to the changing landscape of the video game industry. The studio aims to accept current market conditions as permanent and adjust its operations accordingly.
Source: gamespot.com