Don't Nod, the studio behind the Life is Strange series and Lost Records: Bloom and Rage, is reportedly facing significant financial difficulties, including potential mass layoffs and insolvency. A statement released by Le Syndicat des Travailleureuses du Jeu Vidéo (STJV), a French game workers union, indicates that the studio has entered a "safeguard procedure." This legal measure is designed to help companies facing financial distress avoid complete bankruptcy.
The union claims that Don't Nod's CEO, Oskar Guilbert, informed employees about the safeguard procedure, framing it as an act of anticipation. Last year, employee representatives were presented with two scenarios: either future games would secure funding, leading to layoffs, or the company would face liquidation if funding was not secured. The current situation suggests the latter is now probable, as STJV states the company lacks the funds to even complete its existing redundancy plan for previously laid-off employees.
According to the STJV statement, Don't Nod will be unable to finish its final in-development project, referred to as P14. This is attributed to extensive layoffs that will affect "nearly all of the non-managerial jobs," with specific departments seeing significant reductions in staff. The union alleges that management's approach involves individualized targeting and an illegal intent to retain specific individuals rather than jobs.
In an effort to continue operations despite these staff reductions, management is reportedly relying heavily on outsourcing. The STJV criticizes this strategy, asserting that the costs associated with outsourcing a largely internal project and the loss of experienced personnel have been overlooked in favor of short-term cost-saving measures with uncertain benefits. "Anyone with a little experience with video games production and sanity understands how out-of-touch such a plan is," the union stated.
The union also described the negotiation process with Don't Nod's employee representatives as a "farce," suggesting the company had no genuine intention to negotiate. Concerns about the studio's future have been reportedly voiced by employee representatives for years, citing mismanagement and miscommunication. The STJV concluded that management's belief in a miracle funding solution for an overly ambitious and expensive game ignored warnings from employee representatives, middle managers, auditors, and the union itself.
The STJV consultation is set to conclude on November 3rd. Following this, the regional agency for employment and industry will have 21 days to review the plan. If accepted, employees could receive their termination notices as early as November 25th. If the plan is rejected, management will reportedly be required to find an alternative solution to insolvency, a task the union suggests may be challenging given the company's apparent lack of contingency planning.