Overview
Avalanche Studios, the Swedish developer best known for the Just Cause series, announced a major restructuring that includes closing its Liverpool office and trimming staff at its studios in Malmö and Stockholm. The move comes after months of uncertainty, including the pause of development on Contraband, a collaboration with Xbox Game Studios. While the company did not label Contraband as a direct cause, industry observers see the project’s pause as part of a broader set of pressures facing the studio and the sector.
The company framed the changes as necessary in light of the current challenges in our business and in the industry as a whole. The Liverpool closure will proceed through a formal consultation process under UK law, and the exact number of roles affected across all sites has not yet been disclosed.
The Liverpool closure
In the United Kingdom, shutdowns of a site trigger a formal consultation with staff representatives and appropriate authorities. Avalanche confirmed that the Liverpool office will be closed as part of its restructuring after this process, but the number of positions impacted remains to be determined. The decision reverberates through teams that were working on various projects and through partner relationships tied to the studio’s broader portfolio.
Sweden: Malmö and Stockholm layoffs
The restructuring also features reductions across Avalanche’s Swedish operations in Malmö and Stockholm. The company did not specify a firm headcount, but officials described the reductions as affecting multiple teams within the Swedish development network. The aim, according to management, is to realign resources with a leaner product strategy while preserving core capabilities.
Contraband paused; context for the broader move
Contraband was first announced four years ago as a collaborative project with Xbox Game Studios. Its development has been paused following Microsoft’s extensive layoffs earlier in the summer. Avalanche did not explicitly state that the Contraband pause caused the restructuring, but industry observers view it as a contributing factor within a tougher financial climate and shifting publisher priorities.
Earlier closures and the studio’s stated vision
This year, Avalanche shut offices in New York and Montreal as part of its belt-tightening. Despite the current turbulences, the company emphasizes that its broader mission—to create living, immersive game worlds—remains intact. Leadership also underscored a commitment to supporting affected employees through the transition, whether by internal transfers where possible or external opportunities within the wider industry.
What comes next
As the board navigates this restructuring, industry-wide pressures continue to reshape how studios plan, fund, and staff their projects. Avalanche’s path forward appears to focus on concentrating resources on flagship franchises and live-service worlds, while rebuilding critical capabilities and partnerships. The company has promised updates as the restructuring unfolds and has reiterated its commitment to helping affected staff find new roles, including opportunities within the broader game development community.
For players and partners, the announcements signal a period of adjustment, but they also reflect the realities of keeping a live, evolving game ecosystem healthy in a volatile market. Avalanche Studios’ leadership says the vision of building vivid, lasting game worlds remains their North Star, even as they navigate a challenging landscape.
