Don't Nod launches 'transformation initiative' that could mean more layoffs

Don't Nod, the French studio behind Life is Strange and Aphelion, has announced a "transformation project" that may trigger a formal redundancy process. The company confirmed the situation in a statement to Eurogamer on September 2nd, a day after an initial press release.

The transformation project may involve a Plan de Sauvegarde de l'Emploi — a PSE — which is the mandatory French legal process required when a company with 50 or more employees considers letting go of 10 or more people. Whether a PSE will actually be launched was set to be confirmed at a board meeting and a first session with employee representatives on Thursday. Don't Nod said it opened discussions with representative trade unions and that the information and consultation process has already started. The studio framed the restructuring as a response to "significant changes in the economic and financing environment of the video game industry" and "deterioration of the Group's key economic indicators" — not, it stressed, as a reflection of lost confidence in its staff.

Don't Nod has had a rough few years. The studio built its reputation on narrative adventure games, most notably the Life is Strange series, and has been expanding its publishing arm alongside internal development. The broader games industry has been hammered by layoffs since 2023, with studios of all sizes cutting headcount as post-pandemic spending normalised and investment dried up. Don't Nod is far from alone in citing a "profoundly changed" market, but the language in this announcement — combined with the formal PSE mechanism being on the table — signals the situation is serious.

The studio said it will share the main elements and next steps of the transformation project after the board meeting and the first employee representative meetings this week. It also emphasised that the goal of the restructuring is specifically to "preserve the Group's competitiveness and ability to continue its activities" — in other words, to keep making games, not to wind down.