Paramount Games Hit by Layoffs as Skydance Teams Face Post-Merger Restructuring

Paramount Games has reportedly begun cutting staff from the teams formerly operating as Skydance Interactive and Skydance New Media, with more than 30 developers said to have been affected by the restructuring. The layoffs arrive only months after the two studios were brought together under the Paramount Games name and roughly a month after the wider merger involving Paramount and Warner Bros.

The scale of the reductions has not been formally detailed by the company, and it remains unclear whether any employees from the Warner Bros. side of the newly combined business have also lost their jobs. What is clear is that the impact has reached a substantial number of game developers, including people working across design, engineering, and other disciplines. Several affected staff members have publicly shared that their time at the company has ended.

Among them is associate design director David Ballard, who said his nearly four-and-a-half-year chapter with Skydance and Paramount had concluded through a layoff. Ballard described the moment as a sad one for the colleagues who were affected alongside him, while expressing gratitude for the opportunities he received during his tenure.

The cuts are another difficult reminder that large-scale corporate consolidation does not necessarily create immediate stability for the developers making games. Even when leadership positions games as a major pillar of a newly expanded entertainment company, internal reorganization can quickly reshape teams, alter priorities, and put projects in doubt.

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From VR specialist to a broader games division

Skydance Interactive was established in 2016 with an emphasis on virtual reality development. Its catalog includes Behemoth, the 2024 VR action-adventure that combined large-scale fantasy encounters with an adventurous tone reminiscent of classic action games. The studio helped establish a recognizable identity through VR projects at a time when the format remained creatively ambitious but commercially challenging.

Alongside Skydance Interactive, Skydance New Media was pursuing a more expansive portfolio that included projects based on established entertainment properties. The combined games operation has been associated with collaborations including TMNT: The Last Ronin and Avatar Legends: The Fighting Game. It was also working on a previously unannounced role-playing game built around a dark academia setting.

That unannounced RPG had been presented internally as an opportunity to build a wholly original world rather than relying on a licensed universe. Ballard had previously celebrated the chance to work on a new intellectual property, describing his enthusiasm for helping create its setting alongside the team. The gap between that optimism and the current layoffs is particularly stark: the project was being discussed only four months before Ballard confirmed his departure.

There is no confirmation on whether the original RPG remains in active production, has been scaled back, or has been cancelled. The status of the company's other announced game projects is similarly uncertain. Layoffs do not automatically mean that a game has been ended, but reductions in the teams responsible for development can have significant consequences for schedules, scope, staffing plans, and creative direction.

Developers speak out after the cuts

News of the layoffs emerged through public posts from current and former employees. Lead engineer David Vera, who said he was not personally affected, used his message to advocate for the people leaving the company and to emphasize the quality of their work.

Vera wrote that the departing developers were not let go because of poor performance or workplace behavior. Instead, he characterized them as capable collaborators who had worked intensely to make games they could be proud of. His post named more than 27 people, illustrating both the breadth of the cuts and the number of specialists now seeking new opportunities during an exceptionally difficult period for game industry hiring.

At least 30 Paramount Games employees were reportedly impacted. The exact number may be higher, as neither a complete list of affected employees nor a company-wide total has been announced. It is also not known which individual disciplines or projects absorbed the largest losses.

For developers, the timing is especially challenging. Industry-wide layoffs have created a crowded job market in which experienced workers from major publishers, independent studios, and technology companies are competing for a limited number of open roles. The result is that a restructuring decision can have effects well beyond a single studio, as teams lose institutional knowledge and displaced staff face a prolonged search for their next position.

A merger brings more uncertainty to game development

The layoffs follow a period of rapid organizational change. Skydance Interactive and Skydance New Media were folded into Paramount Games over the summer, consolidating the company's gaming efforts under a new banner. The move came amid a broader corporate transformation following David Ellison's merger of Paramount and Warner Bros.

Large entertainment mergers often arrive with promises of broader reach, stronger franchises, and opportunities to share resources among film, television, games, and consumer products. At the same time, they frequently lead to cost reviews and duplicated-function assessments as executives determine how the combined organization should operate. Game studios can be particularly exposed during this process because their projects require substantial investment over several years and because their business plans can be revised quickly when leadership changes.

Earlier this year, Skydance vice president Tony Driscoll said games were no longer simply an extension of the company's business, describing them instead as a central driver of storytelling, community, and growth across Paramount. Driscoll now also oversees Warner Bros. Games, placing a wider collection of studios and properties under his purview.

That position makes the current staffing cuts notable. The company's stated strategy recognizes games as an important part of its future, yet the restructuring indicates that leadership is still determining what its development organization will look like in practice. A commitment to games at the corporate level does not clarify which studios will be maintained, which projects will receive full support, or how resources will be distributed among licensed titles and original ideas.

What could happen to TMNT, Avatar, and the original RPG?

For players, the most immediate question is what the changes mean for the games already connected to Paramount Games. TMNT: The Last Ronin carries the expectations attached to one of the most prominent recent stories in the Teenage Mutant Ninja Turtles universe. Avatar Legends: The Fighting Game also has the challenge of adapting a well-known animated world into a competitive genre with demanding audiences.

Neither game's fate has been publicly tied to the layoffs. However, the absence of clarity leaves room for concern, particularly when a company is restructuring multiple teams at once. Projects can continue after layoffs with smaller staffs, outside support, revised milestones, or different internal ownership. They can also face delays as responsibilities are reassigned. Until Paramount Games addresses the status of its slate, it is not possible to say which outcome applies here.

The dark academia RPG may be in an even more vulnerable position because it was not yet announced and therefore had not built a public audience. New intellectual properties are often valuable long-term investments, but they may also be scrutinized closely during budget reviews because they do not bring the instant recognition of a licensed franchise. The project's previous internal enthusiasm suggests the team saw real promise in it, but no public information establishes what stage of development it had reached.

Behemoth also represents an important part of the story. It demonstrated Skydance Interactive's established VR expertise and its willingness to pursue big action-adventure ideas in the medium. Whether that specialist knowledge will remain a major part of Paramount Games' future strategy is another unanswered question. The company could choose to preserve VR development, shift resources toward larger multiplatform licensed releases, or pursue a mixture of both approaches.

Talent and transparency matter next

For now, the human cost of the layoffs is the most concrete outcome. Developers who helped build games, prototypes, worlds, systems, and pipelines are leaving amid a volatile employment landscape. Public messages from coworkers have focused on their abilities and professionalism, offering a useful counterpoint to the assumption that layoffs reflect an individual team's quality or effort.

Paramount Games has an opportunity to provide more clarity about the future of its projects and its remaining studios. Confirmation that named titles are still moving forward, along with a clearer outline of the organization's development priorities, would help players understand what the merger means for its game portfolio. It would also give remaining employees and external partners a better sense of where the company is heading.

Until then, the situation stands as a troubling early chapter in the formation of Paramount Games. The company has access to recognizable entertainment properties, VR development experience, and teams that had been building both licensed games and original concepts. But the layoffs show that assembling those pieces under one corporate structure has come with immediate disruption. The next decisions surrounding staffing, project support, and communication will determine whether the new games division can turn its stated ambitions into a stable future for the people making its games.