San Mateo, CA — In a sobering development for the gaming industry, Crystal Dynamics, the studio behind the Tomb Raider series, has confirmed a second round of layoffs in 2025, citing “evolving business conditions” as the catalyst for the decision. This new round follows a similar downsizing in March, where 17 employees were let go. The most recent cut, however, remains undisclosed in terms of scale.
A Pattern of Restructuring Amid Industry Volatility
Crystal Dynamics’ announcement, posted on their official LinkedIn page, echoed familiar sentiments: “Today we made the very difficult decision to part ways with a number of our talented colleagues … necessary … to ensure the long-term health of our studio and core creative priorities in a continually shifting market.” They reassured those affected that the company would extend “the full extent of support and resources” during this transition.
The Bright Side: Tomb Raider Project Unscathed
Despite the layoffs, Crystal Dynamics was quick to underline that the future of the Tomb Raider franchise remains unaffected by the decision. Work continues on the next installment, which is being developed using Unreal Engine 5 and is slated to be published by Amazon Games.
This reassurance comes despite earlier project turmoil—most notably, the cancellation of the Perfect Dark reboot, a collaboration with Xbox’s The Initiative, which was shuttered last month.
Context: Layoff History at Crystal Dynamics
This marks the second confirmed round of layoffs in 2025, following the March reduction of 17 staff members. Prior to that, in September 2023, Crystal Dynamics also conducted cuts affecting ten employees—primarily in marketing and IT—while stating that key projects like Perfect Dark and Tomb Raider would not be impacted. The cumulative effect has raised concerns about stability across the studio.
Behind the Curtain: Embracer Group’s Role
Crystal Dynamics operates under the umbrella of the Embracer Group, which acquired the studio (and the Tomb Raider IP) from Square Enix in August 2022. Since the acquisition, Embracer has undergone aggressive restructuring and layoffs across its portfolio, triggered in part by a failed $2 billion deal that negatively affected its financial standing. Shares dropped by 40% following the collapse of that major agreement.
Many affected employees reportedly lost their jobs as Perfect Dark was canceled—highlighting how external project decisions can cascade internally.
Broader Industry Trends
What’s happening at Crystal Dynamics reflects a broader crisis in the gaming industry: around 40,000 developers globally have faced layoffs in recent years. Factors such as “overinvestment during the pandemic,” rising development costs, and market normalization have forced studios to trim budgets and cut staff.
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