Just Cause and Mad Max developer Avalanche Studios is closing up a studio in the United Kingdom and is laying off an undisclosed number of employees due to “current challenges to our business and the industry.” On September 30, Avalanche Studios Group posted a short update on the company’s official site announcing that its UK development studio in Liverpool is being closed and that all employees will be “impacted.” Avalanche also confirmed in the same statement that layoffs are planned for its Swedish studios located in Malmö and Stockholm. The news of layoffs and a studio closure comes about two months after Avalanche and Xbox announced that the upcoming game Contraband was canceled. Here’s Avalanche’s full statement as posted online: A Studio Update from Avalanche Studios Group In light of current challenges to our business and the industry, we have thoroughly reviewed how to best ensure Avalanche Studios Group’s long-term success. This review has led us to the difficult conclusion that we must make changes to our staffing and locations. As a result, we are proposing to close our Liverpool studio, and to initiate a collective consultation process, as required by UK law. This will impact all Avalanchers in Liverpool. The changes will also impact our other studio locations in Malmö and Stockholm, where we will reduce our workforce and restructure the teams to address our games’ needs. Our immediate focus is to offer full support to all Avalanchers during this challenging time. Despite these changes, we remain deeply committed to providing amazing games to our passionate player communities. Contraband was first announced back in 2021 and was going to be published by Xbox and developed primarily by Avalanche’s studio in Liverpool. However, four years later, we had heard very little about the game and its status. In August 2025, Xbox and Avalanche announced what most people expected: Development on Contraband was being halted as the studio “evaluated” the future of the game and its plans moving forward. It appears those involved with the evaluation have settled on layoffs. This is just one of many, many, many layoffs to happen in the video game industry over the last few years as it becomes more expensive to develop bigger games and harder than ever to get people to play them, as titles like Fortnite, GTA Online, Call of Duty, and Roblox dominate the charts.
The closure of Avalanche Studios’ UK location in Liverpool and the planned layoffs at their Swedish studios in Malmö and Stockholm are signs of the challenges facing the company and the industry as a whole. The decision to close the Liverpool studio will impact all employees there, while the restructuring in Malmö and Stockholm will result in workforce reductions and team changes. The announcement of the closure and layoffs follows the cancellation of the game Contraband, which was set to be a collaboration between Avalanche and Xbox. With little information about the game’s progress over the years, the decision to halt development and the subsequent layoffs have left many in the industry questioning the future of Avalanche Studios. The closure of the UK studio and the layoffs in Sweden are part of a larger trend in the video game industry, where rising costs and shifting player preferences are making it increasingly challenging for developers to create and release successful games.
The news of Avalanche Studios’ studio closure and layoffs highlights the uncertainty and volatility of the video game industry. The decision to close the Liverpool studio and restructure the teams in Malmö and Stockholm reflects the company’s efforts to adapt to the changing landscape of game development. While the cancellation of Contraband and the layoffs may be disappointing for employees and fans alike, Avalanche Studios remains committed to delivering high-quality games to its player communities. As the industry continues to evolve, developers like Avalanche will need to navigate challenges and make difficult decisions to ensure their long-term success. Despite the setbacks, the company’s dedication to creating engaging gaming experiences remains unwavering.
