The gaming industry’s layoff trend continues to show no signs of slowing down. Iron Galaxy Studios, the Chicago-based developer behind Tony Hawk’s Pro Skater 3 + 4 and the PC ports of The Last of Us Part I and Part II, has announced another round of layoffs. In a statement posted to LinkedIn, the studio said it’s reducing its company size as it adjusts to a new company structure.
This is the second round of layoffs for Iron Galaxy in roughly a year, following the 66 employees it let go in early 2025. Unlike a lot of the recent industry statements that have tried to frame layoffs as a response to temporary conditions, Iron Galaxy’s message takes a different angle. The studio specifically calls out that it’s “adopting a new posture to accept these current market conditions as permanent,” pointing to the way players consume games and how publishers are investing in development as fundamentally changed since 2020.
Iron Galaxy said in its statement that “it’s impossible for us to sustain the team size that we’ve carried this past year, even after our downsizing from last year.” The team also acknowledged the emotional weight of the cuts, noting that providing a wonderful experience for its employees is one of its core values, and that it will help those affected with introductions and referrals as they search for their next roles.
Honestly, Iron Galaxy’s framing here is refreshingly honest, even if the news itself is brutal. The studio has been around since 2008 and has worked on dozens of titles, from Killer Instinct seasons 2 and 3 to the ill-fated Rumbleverse. It’s also one of many studios that have had to downsize recently, following layoffs at Eidos Montréal and countless others over the past few years.
