Just Cause developer Avalanche Studios is making layoffs and shutting down its Liverpool studio.
The news comes less than two months after the Swedish company announced it would be pausing work on Contraband, an upcoming co-op title that was being developed in collaboration with Xbox Game Studios Publishing.
Contraband was announced back in 2021, but active development was paused shortly after Microsoft announced sweeping layoffs in July 2025. Those cuts impacted numerous studios and projects within the company’s video game division.
Notably, they also appeared to impact external developers who had been working with Xbox Game Studios Publishing.
Avalanche didn’t mention Contraband or Microsoft when announcing its restructuring plan. The company simply stated it has been impacted by “challenges to our business and the industry.”
“We have thoroughly reviewed how to best ensure Avalanche Studio Group’s long-term success,” reads a statement posted on the Avalanche website (spotted by Dbltap).
“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 Malmo and Stockholm, where we will reduce our workforce and restructure the teams to address our games’ needs.”
Avalanche said it will be offering support to all employees and remains committed to developing “amazing games.”