Until Dawn and Little Nightmares III developer Supermassive Games intends to make 36 employees redundant to adapt to a "challenging" industry environment.
The UK studio confirmed the news in a post on Linkedin and said it has commenced a redundancy consultation process with those impacted.
"This decision was not taken lightly and we know this will be an incredibly difficult time for everyone. Our absolute priority will be to offer full support to those affected," reads the statement.
"We remain focused on our upcoming projects and have made the decision to move the launch of Directive 8020 to the first half of 2026. The response to the game so far has been fantastic and this additional time will help us deliver the very best experience for our fans."
The studio confirmed the development of Little Nightmares III won't be impacted by the impending job cuts.
Supermassive and its workforce have endured a turbulent few years. Co-founders Joe Samuels and Pete Samuels departed the company in February 2024, with both choosing to exit the video game industry for different reasons.
Shortly after, Supermassive confirmed it was planning a restructuring program that would result in an unspecified number of redundancies. An internal email seen by Bloomberg at the time indicated that 150 roles were at risk and that 90 people would eventually be kicked to the curb.
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Game Developer has reached out to Supermassive for comment on the latest round of cuts.