Stockholm-based Just Cause developer Avalanche Studios is readying to lay off 77 workers, creative director and founder Christofer Sundberg told Edge on Tuesday.
Sundberg explained in a phone interview, "We actually haven’t let anyone go yet. The employment laws in Sweden are basically on a ‘last in first out’ basis. Many employees are actually unionized, so we have to negotiate with the union.
"It can be considered illegal, even if someone is not unionized, to let them go before the negotiations are done, according to Swedish law."
He said that management has sent to the union a proposal to lay off 77 workers, about half of total staff. Employees were informed of the suggestion.
Sundberg’s comments confirmed an earlier report on Game Reactor International.
The amount of workers laid off is "based on what we can afford to keep right now," he continued. "…Hopefully the negotiations we’re in right now will go well, and no one has to go, but that’s in the most perfect world. But I’m hoping we can keep some of them through all of this."
He said that the current economic crisis may have contributed to the situation, but admitted that the studio had lost two publishing deals this year.
The first canned deal happened when a publisher "got a bit conservative with its product portfolio," Sundberg said. "We’re focusing very strongly on original IP. This project did not fit in their product catalog anymore."
In total, the two cancelled projects amounted to $34 million.
According to Sundberg, Just Cause 2, the Eidos-published follow-up to the 2006 original, is still in development and "coming along very well" despite the proposed layoffs. He said that "some" of the Just Cause 2 team would "most likely" be laid off. He didn’t disclose how many people from the team would be affected.
"What we’ve been working on the last two years [with Just Cause 2] was to work on all of the criticisms of Just Cause 1. … We’re confident we’ve addressed all those issues."
The free-to-play game The Hunter is also still in development by Avalanche.
Sundberg reflected on the current state of the games industry, questioning if the current publisher-developer model is really the most efficient way to do business.
"This is not the first time I’ve had to go through something like this. I’ve seen this happen before in the 15 years I’ve been in this industry. … I’ve been through it twice myself. These things happen," he said.
"The important thing is to come out stronger on the other side. … What it does do is make you think of the business models–whether this whole publisher-developer model works anymore.
"I can fully understand that partnerships can get more ‘careful,’ but developers have to be careful too. No one is safe, really."
Kris Graft and Rob Crossley contributed to this article.