The video games industry is a turbulent place where job security is always questionable. In the early 2020s, we saw quite frankly too many people lose their jobs in this sector, a feat that thankfully slowed in 2025 in comparison to the years prior. 2026 is unfortunately starting with some grim news, as virtual reality developer Cloudhead Games is undergoing major layoffs.
This has been confirmed in a statement on social media, where CEO Denny Unger revealed that "due to industry forces beyond control" the developer is being forced to lay off around 70% of its staff, with the cuts happening as of tomorrow, January 7. 30% of the developers will remain employed to "continue the mission."
The exact number of employees losing their job is unclear, but the LinkedIn page for the company does suggest that it employed around 50 people, meaning approximately 35 individuals will be out of work while 15 stay on.
Speaking about the decision, the Pistol Whip creator has stated: "The general downturn of the gaming industry, VR's still nascent challenges, including a lack of platform funding have placed us in an impossible position. And while we've done all we can to reinvest in our people and VR's future from prior successes, we can't build 'bigger swings' alone."
Unger then signs off by noting that "our belief remains in the power of VR as a medium, as a shared dream machine that will one day transform humanity," all while doubling-down on "VR's mainstream relevance" and how he has "much more to say about the challenges and potential opportunities of our industry in a future update."
<social>https://x.com/CloudheadGames/status/2008316673774715195</social>