Skydance Games Confirms Layoffs After Warner Bros.-Paramount Merger

By Grace Kim

Skydance Games confirmed a round of layoffs to Variety on Monday, just over a month after the landmark merger between Warner Bros. and Paramount. On Oct. 6, the company had combined Paramount Games Studio with Warner Bros. Games’ internal developers.

In the reorganization Skydance described to Variety, it also merged the Paramount and Warner Bros. games teams with their respective “experiences” divisions. Tony Driscoll, whom Skydance promoted on Oct. 6, now leads that games-and-experiences unit.

What does the restructuring change for workers and studios?

The Oct. 6 structure brought Paramount Games Studio together with Avalanche Software, the maker of “Hogwarts Legacy,” NetherRealm Studios, Rocksteady Studios, TT Games, and the WB Games teams in Montreal and Boston. Separately, it joined the two games businesses with their “experiences” divisions to create one team.

That team oversees projects based on intellectual property (IP), the entertainment properties around which Skydance organizes its combined portfolio. Skydance listed the IP under two company headings:

• Paramount: “Star Trek,” “Mission: Impossible,” “SpongeBob SquarePants,” “South Park,” “Avatar: The Last Airbender” and “The Godfather.”
• Warner Bros.: “Harry Potter,” DC Universe, “Mortal Kombat,” “The Matrix,” “Rick and Morty” and “Game of Thrones.”

As described by Skydance, the merger joins studio production with portfolio oversight across both companies. Its statement did not say whether every listed property had an active game in development. It described a broad remit for the team and said separately that it was scaling down some projects.

Driscoll’s promotion links two stages of the consolidation. He had been named head of Paramount’s newly launched video game studio in June; that studio combined Paramount’s and Skydance’s gaming assets. On Oct. 6, Skydance promoted him to lead the wider games-and-experiences unit.

Skydance’s spokesperson tied the job losses to a broader reorganization and investment review:

“As part of our ongoing efforts to position Skydance Games for long-term growth and success, we are implementing reorganization and operational shifts across a few areas of our business,” a Skydance spokesperson said in a statement to Variety Monday.

“We have stepped back and taken some time to consider where we are investing our efforts and have made the difficult decision to scale down some of our projects. As a result, there are roles impacted.

“This is not a reflection of the talent, dedication, or creativity of those affected and we are grateful for their contributions. We are committed to approaching the process with transparency, care and respect for those who are leaving the company.”

The sequence in the statement matters: Skydance said it reviewed where to invest, scaled down some projects and then acknowledged that roles were affected. It rejected any reading of the cuts as an assessment of the departing employees’ talent, dedication or creativity, while promising transparency, care and respect.

For affected workers, the practical result is the loss of roles. For the studios, it is a smaller project slate inside a broader organization, with Paramount and Warner Bros. properties and development teams joined under one leader. The statement did not disclose the number of layoffs, the affected teams, the specific projects being scaled back or any severance terms.

The reorganization now concentrates development and portfolio oversight in one unit. Its next test is whether the retained teams can produce from that structure after Skydance has reduced the projects it is funding.