Crystal Dynamics layoffs have become an unfortunate recurring theme for the beloved Tomb Raider studio. The company just announced its third round of job cuts in two years, this time directly linked to Microsoft’s shocking cancellation of the Perfect Dark reboot.
The Perfect Storm: How Perfect Dark’s Death Triggered More Crystal Dynamics Layoffs
The gaming industry got hit with devastating news in July 2025 when Microsoft announced massive layoffs across its gaming division. Among the casualties was Perfect Dark, the highly anticipated reboot that Crystal Dynamics had been co-developing with The Initiative since 2021.
When Microsoft pulled the plug on Perfect Dark and shuttered The Initiative entirely, Crystal Dynamics was left holding the bag. The studio had invested significant resources and talent into the project, only to see it vanish overnight due to what Microsoft called “evolving business conditions.”
Now, Crystal Dynamics is dealing with the fallout. The studio confirmed on LinkedIn that they’ve laid off an undisclosed number of employees, marking their second round of cuts in 2025 alone.
Breaking Down Crystal Dynamics Layoffs: The Numbers Tell a Grim Story
The recent Crystal Dynamics layoffs aren’t happening in isolation. Here’s how the cuts have piled up:
- 2023: 10 employees laid off to “align with business needs”
- March 2025: 17 staff members cut during restructuring
- August 2025: Unknown number of employees laid off post-Perfect Dark cancellation
That’s at least 27 confirmed job losses before the latest round, and the actual number is likely much higher. For a studio that employed 273 people across three locations as of 2022, these cuts represent a significant portion of their workforce.
What This Means for Tomb Raider’s Future
Crystal Dynamics insists that their upcoming Tomb Raider game remains unaffected by the latest layoffs. The studio has been working on a new entry in the franchise using Unreal Engine 5, with Amazon Games handling publishing duties.
But here’s the thing – when a studio goes through multiple rounds of layoffs, claiming projects are “unaffected” becomes harder to believe. Industry insiders have already reported that Crystal Dynamics was “struggling” with Tomb Raider development even before the Perfect Dark cancellation.
The reality is that layoffs create ripple effects. Even if the remaining Tomb Raider developers weren’t directly impacted, losing colleagues and institutional knowledge inevitably affects team morale and productivity.
The Embracer Group Connection
Crystal Dynamics’ troubles didn’t start with Perfect Dark. The studio has been caught up in Embracer Group’s broader financial struggles since being acquired in 2022. Embracer faced over $1 billion in debt after a massive $2 billion deal fell through, leading to restructuring across their entire portfolio.
This context makes the Crystal Dynamics layoffs feel less like isolated incidents and more like symptoms of deeper industry-wide problems. When parent companies are hemorrhaging money, studios inevitably become cost centers to optimize rather than creative teams to nurture.
The Human Cost Behind the Headlines
Behind every round of Crystal Dynamics layoffs are real people losing their livelihoods. Senior environment artist Maja Öberg, who worked as Perfect Dark’s only foliage artist, shared her shock at being let go on social media. Combat designer Mark Vernon also confirmed he was among those cut in the March layoffs.
These aren’t just statistics – they’re experienced developers who invested years of their careers into projects that may never see the light of day. The gaming industry’s volatile nature has created an environment where even talented professionals at established studios can’t count on job security.
What’s Next for Crystal Dynamics?
Crystal Dynamics finds itself at a crossroads. The studio that once revitalized Tomb Raider and created memorable experiences is now primarily known for layoffs and cancelled projects. Their last major release was Marvel’s Avengers in 2020, which flopped spectacularly and shut down in 2023.
The pressure is on to deliver with their next Tomb Raider game. If that project stumbles, it’s hard to imagine Crystal Dynamics surviving another round of “business realignment.” The studio needs a win – both for their employees’ job security and their reputation in the industry.
Frequently Asked Questions
How many people were affected in the latest Crystal Dynamics layoffs?
Crystal Dynamics hasn’t disclosed the exact number of employees laid off in August 2025. The company only stated they “parted ways with a number of talented colleagues” due to evolving business conditions.
Why did Crystal Dynamics lay off workers after Perfect Dark was cancelled?
When Microsoft cancelled Perfect Dark and ended their partnership with Crystal Dynamics, the studio was left with employees who had been working exclusively on that project. With no other immediate work for them, layoffs became inevitable.
Is the new Tomb Raider game still in development?
Yes, Crystal Dynamics has confirmed that Tomb Raider development continues despite the layoffs. However, previous reports suggested the project was already struggling, raising questions about its actual status.
How many Crystal Dynamics layoffs have there been total?
Crystal Dynamics has conducted at least three rounds of layoffs since 2023: 10 employees in 2023, 17 in March 2025, and an unknown number in August 2025. The total is at least 27 confirmed job losses.
What happened to Perfect Dark after the cancellation?
Perfect Dark was completely cancelled when Microsoft shut down The Initiative studio in July 2025. There are currently no plans to revive the project or transfer it to another developer.
Who owns Crystal Dynamics now?
Crystal Dynamics is owned by Embracer Group, which acquired the studio from Square Enix in 2022. Embracer has been conducting widespread layoffs across its portfolio due to financial difficulties.
What games is Crystal Dynamics currently working on?
Besides the new Tomb Raider game, Crystal Dynamics has been involved in various remaster projects including Tomb Raider and Legacy of Kain titles. However, their primary focus appears to be the upcoming Tomb Raider entry.
The Bottom Line
The latest Crystal Dynamics layoffs represent more than just corporate cost-cutting – they’re a symptom of an industry in crisis. When established studios with beloved franchises can’t maintain stable employment for their developers, it signals deeper problems with how the gaming business operates.
For Crystal Dynamics, the path forward is narrow. They need to deliver a successful Tomb Raider game while rebuilding team morale after multiple rounds of cuts. Whether they can pull off this balancing act remains to be seen, but the stakes couldn’t be higher for everyone involved.