CD Projekt Red Lays Off 9 Percent of Studio Staff — Why?

CD Projekt Red is laying off employees again this year.

The popular Polish game developer recently announced it is letting go of some of its studio staff to get "the right teams" to remain in the company.

CD Projekt Red previously laid off some of its employees in May and June from The Molasses Flood and the team that worked on the Witcher card game Gwent, per Engadget.

Losing Weight

CD Projekt Red mentioned in its announcement it is letting go of a hundred of its employees, or 9% of its workforce as part of its efforts to correct its overstaffing issue.

According to the company, it wouldn't have other opportunities for the people it is letting go next year based on current and expected project needs. These projects include Cyberpunk 2077's upcoming DLC, Phantom Liberty.

Additionally, CD Projekt Red explained it has the people with the talents it needs on board who are finishing their tasks.

"To meet our own high expectations and ambitions to create the best role-playing games, we not only want to have the best people but also the right teams," CD Projekt Red CEO Adam Kiciński said. "What we mean by that is having teams that are built around our projects' needs; teams that are more agile and more effective."

Kiciński added that at the time of his announcement, the company is certain that for CD Projekt Red to grow, it has to be consistent in implementing that approach.

The people being let go won't be leaving immediately, though, as some employees will be let go as late as Q1 2024. Nonetheless, the company will reveal when these employees are expected to leave as early as now to give them enough time to process and adjust to the change.

The company assures the employees it is laying off that they'll receive a comprehensive severance package for being let go.

While Kiciński said that the decision the company made was not an easy one, he believes that the relationships the company and the outgoing employees built can remain strong. He encourages them to "stay connected" while thanking them for being an invaluable part of the company's journey.

Good, But Could Be Better

This round of layoffs follows the one CD Projekt Red enacted in May, which led to the laying off of around 30 employees by the end of 2023 as development on Gwent: The Watcher Card Game came to an end, per IGN. These layoffs also follow two previous layoffs from CD Projekt Red-owned The Molasses Flood, which is developing the troubled Project Sirius Witcher game as of press time.

While the layoffs are beneficial for the company in the long run, JP Morgan argues that the layoffs' timing could've been better, per Channel News Asia.

According to the financial services company, the decision appears reasonable in the context of strong wage inflation for developers and an expected drop in activity after Phantom Liberty is out. However, while the Cyberpunk 2077 DLC will mask the costs the severance packages will incur, the layoffs happened two months ahead of the company's most important release since 2020, which could worry investors.