French studio Don’t Nod, the developer of Life is Strange, Vampyr, and Banishers: Ghosts of New Eden, may go bankrupt. The French video game workers’ union STJV says the company has opened financial protection proceedings because it cannot repay its debts.
The union says management told the financial press before it told employees. CEO Oskar Guilbert called the procedure preventive, but STJV thinks the company is close to the worst case.
Last year, management gave employee representatives two scenarios. Either the studio would find funding for future games and still lay off some staff, or it would fail to find financing and be liquidated. The union says things have since gotten worse, and the company can no longer pay severance to employees already chosen for dismissal.
The studio’s latest project, codenamed P14, is at risk too. STJV says the planned layoffs would hit nearly every rank-and-file position: all six animators, all three character artists, all three concept artists, and all six junior producers. They would also cut 18 of 22 programmers, eight of ten environment artists, and four of eight game designers.
The union accuses management of choosing which people to keep instead of which positions the studio needs to operate. It calls this illegal.
Management plans to finish the game with outsourcing and outside contractors. STJV doubts that will work. Moving from in-house development to contractors adds costs, and the studio would lose the knowledge of the people who have built the game so far.
STJV also criticized the talks with employee representatives. It says the company has shown no willingness to compromise and will offer only the legal minimum in compensation.
"In the union’s account, the problems have been building for years. Management ignored warnings from employee representatives, middle managers, the union, and financial auditors, and kept chasing funding for a project that was too big and too expensive. For more than two years it was turned down repeatedly, while employees had to build new demos for every trade show, meeting, and Gamescom. The union says management let the situation reach a dead end because it had convinced itself the funding would eventually come" – STJV.
Consultations with employee representatives are expected to end on November 3. The regional labor and industry authority then has 21 days to review the layoff plan. If it approves, dismissal notices could start going out as early as November 25. If it rejects the plan, management will have to find another way to keep the company out of bankruptcy.
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