What happens if your gaming studio has to make layoffs?

Develop:North – OTB’s insights: What happens if your gaming studio has to make layoffs?

Disclaimer: OTB Legal does not advise Firewalk Studios or Sony Interactive Entertainment and has no personal or professional connection with either company

20 August 2024 – Firewalk Studios and Sony Interactive Entertainment launch Concord, a new flagship hero shooter for PS5 and PC after an eight year development cycle and an estimated budget of $400 million.

03 September 2024 – Sales for Concord cease and everyone who purchased the game is refunded.

06 September 2024 – Concords servers close permanently.

Nothing illustrates the volatility of the games industry greater than a first party game failing to surpass 700 simultaneous players and being withdrawn from sale. Game director Ryan Ellis has stepped down and it has been reported that Firewalk Studios is now in limbo with speculation over triple digit layoffs.

The harsh lesson to learn from this experience is that if it can happen at Sony, it can happen with any studio.. The video game industry is an international one. Many of those working on games in the UK, do so on skilled worker visas. From a business perspective, what does this mean for their international workers when layoffs come?

Reporting departures from the company

Perhaps the most important step from a company standpoint is making the appropriate report when a worker leaves the business. This may seem harsh to list up top, but the cold reality is that this is one of the most important responsibilities a sponsor has. When a worker leaves your employment, you will need to make a report under the ‘report migrant activity’ section of the SMS within 10 working days of the last day of the worker’s employment.

Failing to make this report would be a breach of your sponsor obligations and could lead to the licence being revoked. A revoked licence means that you would no longer be able to employ any of your existing sponsored workers (meaning the employment of any skilled workers not already being made redundant would also need to be terminated), and it may be difficult for you to secure another licence in the future. As a result, when dealing with large numbers of staff exits it is particularly important to ensure that you are maintaining a list of all those who are sponsored, and allow yourself enough time to make the reports after they have left your employment.

What happens after that report has been made?

After you make your report, the Home Office will issue a letter of curtailment to your former employee or employees. This letter will give them 60 days in which to apply for another visa or leave the UK, without becoming an overstayer.

What if you’re not making layoffs?

While rarer, there may be cases where you are not making layoffs but instead shifting the terms of employment or responsibilities to better fit your change of focus internally. Changes to salary, hours or job role must all be reported on the SMS. Of particular importance with changes to salary and hours is ensuring that the pro-rated change continues to meet both the mandatory minimum and the going rate for that role.

When making changes to the job description you will need to be cautious to ensure that the changes are both accurate to the worker’s real world responsibilities but also that they remain in the same occupation code wherever possible.

If the changes move the job into a different occupation code then you will not simply be able to report the change, you will instead need to assign a new certificate of sponsorship so that the employee can submit a change of employment application. This could have significant cost implications, particularly if the employee was last sponsored before 04 April 2024, as the minimum salary requirements would be significantly higher, even under the transitional provisions.

Consideration of employment law

Whenever handling sensitive areas such as change of conditions or redundancies, you have an ongoing duty to ensure you are complying with all relevant employment law principles. We would always recommend speaking with an employment lawyer or HR consultant before engaging with these areas.

Need help?

You don’t need to take the steps above alone. If you need further support on reporting requirements or any other aspect of corporate immigration law then we would be delighted to help.

You can book a free consultation to speak with our specialist business immigration team here: