Crystal Dynamics, the studio behind the iconic Tomb Raider franchise, has announced a further round of layoffs attributed to "evolving business conditions." This marks the studio's second series of job cuts in 2025 and comes in the wake of Microsoft's July cancellation of the Perfect Dark reboot, a project on which Crystal Dynamics was collaborating with The Initiative.
In a statement shared on LinkedIn, Crystal Dynamics expressed regret over parting ways with an undisclosed number of employees, emphasizing that the decision was essential to protect the "long-term health" of the studio amid a shifting market. While the studio has not confirmed the total number affected, multiple former employees disclosed their involvement with the now-canceled Perfect Dark reboot, indicating a direct connection between the layoffs and the project's termination. The Initiative, which led the reboot, was shuttered alongside Microsoft's broader workforce reduction that saw approximately 9,000 roles cut company-wide.
Crystal Dynamics reaffirmed that the future of the Tomb Raider series remains "unaffected" and confirmed ongoing work on a new installment, which will be published by Amazon. The series last saw a full release with "Shadow of the Tomb Raider" in 2018, and recent promotional art unveiled in 2024 signaled new developments, though no release timeline has been announced.
The studio’s recent layoffs reflect wider instability in the gaming industry as Microsoft’s divisions undergo substantial restructuring. Comparable workforce reductions at other studios, including independently-operated Romero Games which canceled an FPS project following funding losses linked to Microsoft's cuts, underscore the sector's challenges. This climate of uncertainty has fueled worker movements toward unionization; notably, in August 2025, over 450 members of the Diablo development team at Microsoft-owned Activision Blizzard voted to unionize. Similar efforts have also taken place among teams working on World of Warcraft, Overwatch 2, and at Bethesda Game Studios.
Embracer Group, which acquired Crystal Dynamics in 2022, has yet to disclose specific figures on the recent layoffs. The studio has committed to providing support and resources to affected employees during their transition and has thanked both current staff and fans for their continued support as it seeks to navigate an unpredictable market.
As the industry continues to adjust in response to corporate restructuring and changing market demands, the layoffs at Crystal Dynamics serve as a stark reminder of the pressures faced by even long-established studios within the console gaming space.
