Naughty Dog reportedly lays off contract workers as troubled The Last of Us spinoff shooter faces an uncertain future

A Kotaku report says Naughty Dog, the developer of The Last of Us and Uncharted games, is the latest studio to lay off employees, with at least 25 contract workers being told that they'll be let go at the end of October. The report also says that The Last of Us multiplayer shooter spinoff announced in 2022 is in trouble, and while it hasn't been cancelled at this point, its fate remains uncertain.

The layoffs were revealed to employees last week, according to the report, and impacted multiple departments but were focused primarily on quality assurance. No severance pay is being offered, possibly because the employees being terminated were on contract rather than full-time; no full-time employees were impacted by the cuts.

It's a surprising outcome at Naughty Dog for a couple of reasons. Naughty Dog is owned by Sony, which means it has access to virtually unlimited resources and, in principle at least, doesn't need to worry about how it's going to finance its next project. And those projects will be sure-fire hits: Uncharted and The Last of Us are both massively successful game series, and The Last of Us is riding a wave of massively heightened mainstream popularity thanks to the hit HBO series of the same name.

Naughty Dog has reportedly struggled with its planned Last of Us multiplayer shooter spinoff, however. Originally intended as an expansion for The Last of Us 2, Naughty Dog co-president Neil Druckmann said when the game was announced that it had "evolved beyond the team's ambition," and was thus made into a standalone project instead. A PC version wasn't confirmed, although we expected that it would be eventually, but in May 2023 Naughty Dog tapped the brakes, saying that it needed "more time" to get it right. That decision apparently came after Destiny 2 developer Bungie—another Sony studio—had a look at Naughty Dog's shooter at Sony's request, and was unimpressed by what it saw. Following that, Sony reportedly reduced the number of people working on the game while it reassessed its viability. 

2023 has been a huge year for new game releases, but it's also been a very bad one for game developers. The reported layoffs at Naughty Dog follow cuts at other studios including Epic Games, Beamdog, Activision, BioWare, CD Projekt, Firaxis, Relic, Embracer Group, and others; in March of this year, both Electronic Arts and Take-Two Interactive announced that after years of success, growth, and multiple billions of dollars earned, they would have no choice but to put people out of work. 

Larger tech firms have made even deeper cuts: Facebook parent company Meta announced the planned layoff of 10,000 employees in March, just four months after letting more than 11,000 employees go near the end of 2022. Microsoft also started off 2023 by letting 10,000 people, while Google cut 12,000 people at virtually the same time.

I've reached out to Sony for comment on the reported Naughty Dog layoffs, and will update if I receive a reply.