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Liquid Sword cuts workforce citing shifting market conditions

Summary
NetEase-backed Swedish studio Liquid Sword has confirmed layoffs, calling them necessary for long-term sustainability
The studio, founded by Avalanche Studios co-founder Christofer Sundberg, did not disclose the number of employees affected
The cuts are part of a broader effort to scale back operations and adapt to current business conditions
Liquid Sword joins a growing wave of industry layoffs - over 900 developers have lost jobs in the first 6 weeks of 2025 alone
"Shifting market conditions prevented us from succeeding within our timeframe"
— Christofer Sundberg, Founder
01

Layoffs confirmed - scale and support details remain undisclosed

Liquid Sword confirmed a workforce reduction but declined to specify how many employees were affected
The studio stated it would provide affected staff with "as much support as possible" without detailing what that support entails
Sundberg framed the cuts as a structural response, not a failure of vision, citing timeline pressures from shifting market conditions
02

Founder acknowledges the cost - but doubles down on the mission

Sundberg originally promised to build a small, expert-driven studio with a sustainable work model
He acknowledged that while much of that vision was achieved, market shifts disrupted the planned timeline
"This is incredibly difficult, but we remain committed to our vision and will continue to work on our IP and first game with a dedicated team"
— Christofer Sundberg, Founder
The studio reaffirmed its core thesis around simplifying the game development process
03

Industry-wide layoff wave continues into 2025

Over 900 developers have lost jobs in just the first 6 weeks of 2025
Affected studios include Freejam, Splash Damage, Piranha Games, Jar of Sparks, Iron Galaxy, and Sumo Group
Ubisoft cut 185 jobs, and ProbablyMonsters initiated another round of layoffs in the same period
Liquid Sword's cuts reflect a systemic pattern of studios scaling back to survive prolonged market pressure
04

What's next - a leaner studio stays the course

Liquid Sword plans to continue development on its IP and first game with a reduced, dedicated team
The studio's long-term bet remains on a smaller, high-expertise operating model
Whether the NetEase-backed studio can sustain momentum through this downsizing will be a key signal for the indie-scale AA space
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