Iron Galaxy Studios, the studio that led development on Tony Hawk's Pro Skater 3+4 and also co-developed PC ports for The Last of Us Part I, The Last of Us Part II Remastered, Uncharted: Legacy of Thieves Collection, and several other titles is now the latest studio to announce layoffs in 2026.
A statement was posted to the studio's LinkedIn page to confirm the cuts, though the studio did not disclose the number of people who are losing their jobs. A report from Game Developer did, however, add that the company is "drastically" cutting down its size.
These cuts come a little more than a year after the studio's last layoff, where it cut 66 developers in what it called "a last resort" that it took "to enable our long-term survival." This time, rather than try to call the cuts as part of a survival tactic it only took because it had to, it's framing the cuts as just a reality of today's video game industry.
The studio reflects on how 2020 was the start of what it is now accepting to be "permanent" change to the video game industry. These cuts come as part of the company committing to a new structure, one that its leadership feels is necessary to survive in the modern video game industry in 2026 and beyond.
"Today, Iron Galaxy Studios regrets to announce that we are reducing our company size," the statement began. "A number of teammates and friends are losing their jobs as we adjust to a new company structure. We are terribly sorry to lose them as we take steps to adapt to the climate of the video game industry. It's time for us to evolve again."
"Since we first got started, we have taken on many different forms as a company. Throughout these different phases, we have changed our focus, our mission, and our size. We've worked with the best creators of interactive entertainment and made some games of our own. Along the way, we've seen the industry that we serve expand and contract in surprising ways."
"Ever since 2020, when everything about making video games started to change, people have been waiting for business 'to get back to normal.' These are the conversations we've had with colleagues and partners on our travels to the places where game creators gather. This year, we're adopting a new posture to accept these current market conditions as permanent."
The statement goes on to lament about how players have changed their habits, how publishers have changed what criteria they look for, and that all of this change has not only impacted Iron Galaxy, but its partners. The studio's latest 'evolution' is part of the "painful decisions" it "must make," saying that it would be "impossible for us to sustain the team size that we've carried this past year, even after our downsizing from last year."
"We hate losing people," the statement continues. "One of our core values is providing a wonderful experience for the talented folks who work for us. The best we can do for them today is to help them start writing the next chapter of their career. They are all welcome to introductions and referrals from us. If you need good people, please be on the lookout for them. Thank you."
The realities of the current video game industry are impacting everyone; that is absolutely undeniable. Iron Galaxy is not the first studio to cite market conditions as the decision behind cuts, nor will it be the last, but the fault of layoffs taking place always lies with leadership, and if layoffs happen, it is because a company's leadership failed to prevent them. That's the real unfortunate truth of every round of cuts, and it serves no one to wax poetical on the other factors and what "must" be done.
Earlier this week, a new survey from Skillsearch showed that 44% of the game developers who responded to the survey (of which there were over 1,000) are considering leaving video games due to the number of layoffs. Earlier this year, the GDC State of the Games Industry 2026 annual report said 1-in-4 of its respondents had been laid off in the last two years. Nearly half of its respondents were still struggling to find a new role at the time of the report's publishing.
"I can't fully trust anywhere now," said one of its respondents, who had been laid off several times within the last six years. The more developers are laid off, the more volatile the industry will be, and those looking to get into it, along with those who have been a part of it for years, will leave. When the game industry can't rely on a new graduating class of bright and youthful energy coming in, and when those who do still choose to join it despite the bad odds can't rely on a class of mentors to help them on their path, the result is a worse industry that produces worse games.
Every layoff is always unfortunate, and it's awful to see even more developers forced to endure the trauma that comes along with it. But it's beyond time for studio leadership across teams of all scales to find a different solution as they try to adapt to the current market.
About the author: David has been writing about videogames, technology, and culture since 2020, with a focus on reporting daily news across multiple publications, including GameDaily.Biz, GameSkinny, and PlayStation Universe before joining Wccftech in 2025. David started contributing as Canada/US reporter for Wccftech's gaming section in 2025. Besides being up-to-date on the industry's movements, he loves interviewing developers, reviewing games, and writing intricate essays about the symbolism and layered meanings to be found in rich narratives as he's done for publications like GamesIndustry.Biz, LostInCult, and others. Outside of games he loves movies, music, theatre, his hometown, and his family, though not necessarily in that order.
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