If you had asked me in 2022 whether or not I’d still be writing about a seemingly endless onslaught of games industry mass layoffs in 2026, I’d have been confidently wrong in saying no. Yet here we are, four years after stories like this began to come out, and there’s no end in sight. We have rough numbers that barely capture the devastation: some 8500 in 2022, over 10,000 in 2023, over 14,000 in 2024, an optimistic-looking 5300 in 2025, but we’re already up to 4600 in 2026. And that’s the numbers we’ve been told about. Nevermind the many, many more individuals who were left out of those counts in quieter layoffs, or ones where major companies successfully avoided disclosing actual numbers.

But that’s not everyone, either. There’s another group of individuals whose jobs are being devastated by the sudden rush to cut budgets: contractors. Contract labor is a cornerstone of the video games industry, with most major gaming studios using contract labor to supplement existing in-house teams, or even as the basis of entire departments, such as QA. AAA gaming companies frequently employ hundreds, sometimes even thousands of contractors, who very often work on time-limited contracts that are renewed whenever the contract ends—or a few months after, depending on what labor laws a company is trying to dodge that day. Some contractors are employed through major contracting firms and receive some benefits as a result, while others are fully independent and don’t receive anything but an unsteady paycheck.

Right now, all of those jobs are actively in even more danger than usual, and have been for several years. As companies look for ways to shore up their budget sheets for investors, reducing spend on contract labor is an easy solve, right there along with reducing full-time employees. And as both of those classifications of employees are let go, the job market floods with even more out-of-work individuals vying for fewer and fewer jobs.

For this piece, I spoke to a number of contractors who had recently worked with companies such as Activision, Epic Games, Bungie, and Microsoft, and whose contracts had either been given an expiration date, or eliminated entirely. Every one of them described a situation to me in which the company in question had been actively eliminating tens, or even hundreds of contract positions in the last year. In some cases, those reductions took the form of contracts allowed to expire and never renewed. In others, contractors were unexpectedly cut loose mid-contract without warning.

Fantasy Villains

Contractors already get a pretty raw deal, in video games as elsewhere, even when they are employed. Most of those I spoke to told me they were working for minimum wage or just barely above it, and most didn’t have any benefits to speak of, unless they were working for a larger contracting agency that offered them. One person told me they had to crowdfund to help pay for significant debt due to low pay.

“I feel like I work for fantasy villains sometimes,” said one contractor who had worked with Microsoft on Minecraft and who was recently let go. “I can imagine Mr. Monopoly sitting on top of his pile of money twisting his mustache while he decides my coworkers don’t get to eat anymore.”

They described attending weekly meetings as a contractor where they were told, among other things, how many billions of dollars Minecraft was making. “I feel powerless, I feel certainly exploited. I haven’t gotten a raise in two and a half years. Whether that’s Microsoft’s fault or my contract agency’s fault, who’s to say? It’s really convenient for them that they can point the finger at each other.”

With low pay and few to no benefits, many of those I spoke to described working as a contractor as simply a means to an end: they would love a full-time job in games, but there just aren’t enough to go around, and they want to stay in the field as long as they can. A few cited the flexibility of contracting as a benefit, as they could take on multiple jobs at once, work on side projects, and set their own hours. But for most, that doesn’t make up for the low pay, and not every contractor has that same flexibility anyway. 

Machine Takeover

And none of that matters when you can’t find work in the first place. Several of the contractors I spoke to told me they’d been worried for months about the prospect of their roles being replaced by generative AI, even mentioning they were aware of their own work being used to train AI internally. One contractor with Epic recalled attending regular meetings about how to better use Claude AI in their work, and other contractors elsewhere told me they had been encouraged to attend similar meetings.

Another person I spoke to worked at a company providing localization services to multiple video game clients, including several in the AAA space. In 2026, two of its biggest clients, both of which the company had partnered with for over eight years, not only underwent internal layoffs, but also cut their contract with the services company without warning. This resulted in layoffs at the localization company, on top of the ones already happening internally at those studios. “Times are tough,” my source told me. “We are now in survival mode, until we can find other clients, but the current situation for language service providers, (let alone the video game industry) is dire, so I’m not even sure we’ll be able to make it.”

What’s more, they told me that both lost clients had recently switched to machine translation with human post-editing (MTPE), which they could get much cheaper than human translation services. My source told me their company refused to use MTPE, which is likely what caused their contract to be dropped.

“We are now in survival mode”

“Because machine translation output is mostly mediocre and often has to be retranslated manually to preserve the level of quality a human translator can provide, MTPE meant we were going to invoice translation at the cost of proofreading, about 3 to 4 times less, which is unacceptable,” they said. “Unfortunately, many publishers and language service providers are pushing for MTPE, slowly but surely killing human translation in video games.”

Budget cuts like these impact individual contractors differently. One former Bungie contractor I spoke to said they seem to have been forgotten by Bungie entirely. During the recent wave of mass layoffs, they were sent an email saying their role was not impacted. However, since then, they also haven’t received any new work for months. They suspect this was because their former contacts at Bungie had all been laid off, and they had no idea who to reach out to or follow up with to see if they were still employed. This person also told me that despite working on multiple elements of Marathon, their name was nowhere in the credits, per what they say is an actual Bungie policy not to list contractors. “I feel pretty invisible in that regard.”

The Meaning of Job Security

It might be easy for some to dismiss the job insecurity faced by contractors who see their contracts brought to an end prematurely. Everyone I spoke to understood that their jobs were always tenuous. But they all also reported having plenty of reason to expect that their gig would be relatively steady for months, or even years to come…until recently. One contractor I spoke to, whose contract with Epic Games had recently ended, told me that “everything felt really good right up until those layoffs,” referring to Epic’s cutting of over 1000 full-time people earlier this year. This person, though a contractor, had just gotten back from an on-site meet-up where everyone left feeling optimistic and motivated. Less than a month later, what felt to them like half their team was gone.

Another person I spoke to, who lost their contract with Bungie, had a different perspective as they described the uncertainty around working on a game like Marathon. “Things were definitely tense the entire time,” they said. “I’m sure you’ve seen how much even the players were worried that Marathon would get the plug pulled at any moment. But it still felt like the team I worked with valued me and would call me back so long as there were things to be worked on. We were really aware of the Concord jokes before Marathon launched, for example.”

The Minecraft contractor I spoke to was technically a full-time employee of a third-party contracting firm that had signed a broad contract with Microsoft for large amounts of labor over several years. Again, this person felt their job was relatively stable: their project was an ongoing, long-term one, and they had been receiving positive feedback on their work. Even so, that contract ended for most of those employees a few weeks ago. Theoretically, they say, the agency should be able to find more work for them, but they aren’t optimistic. 

“I didn’t see it coming. I don’t think anyone on my team saw it coming.”

They told me they were originally planning to shore up their resume and talk to everyone they knew. But then they realized, “Everyone I know doesn’t have a job in the games industry.” They say they sent off roughly 600 applications in three months, got no interviews, and a couple dozen rejections. “It’s insane how hard it is to feel like I’m being heard.”

“Industry’s cooked,” they added.

Every time I open LinkedIn or Bluesky I’m seeing another studio’s doing layoffs, so there’s another hundred or thousand people looking for the same jobs I’m looking for

In multiple cases, contractors I spoke to told me that within months of their position being eliminated, they saw their exact role listed for hire again on one or multiple job websites. One person even told me a recruiter reached out to them to try to hire them for the job they had just been cut from.

The job search has gotten notably worse in recent years as fellow contractors lose their opportunities and full-time employees flood the job market post-layoffs. “I shudder to think about how many people are also applying to these positions,” the former Epic Games contractor said. “Every time I open LinkedIn or Bluesky I’m seeing another studio’s doing layoffs, so there’s another hundred or thousand people looking for the same jobs I’m looking for. It’s only getting harder when the bucket is filling constantly.”

That same contractor concluded by telling me that they did not feel the current system was working. While they understood that a gig economy made sense for some departments, they added that they wouldn’t wish that sort of stress on people. On a contract, they said, you’re always thinking, “How long do I really have a job for?” 

“I just wonder what everyone is really going to do next,” they said. “What the industry is going to look like if and when things recover, and how many good people are we going to lose because they’re just too exhausted? We saw Glen Schofield make that really sweet video about how he’s done with the industry, and there are so many people who don’t have the power of the name Glen Schofield but are just as talented. It really makes me wonder what games are going to look like when that talent just doesn’t want to come back.”