Veteran VR Studio Cloudhead Games has announced layoffs effective January 7, 2026. This huge layoff is resulting in the loss of the studio’s 70% workforce, with only 30% remaining behind to continue working on their projects. The news was announced by the studio’s CEO, Denny Unger, in an official Twitter post, which was followed by posts by several of the staff who were affected by the layoffs. The post also shares a detailed Excel sheet that has names and contact information of all the laid-off staff if anyone wants to hire them. All in all, around 36 staff members have been affected by the layoff.
In the official statement, Denny mentions that VR is still not a mainstream gaming platform, and because of this, there is a lack of funding, which led to this tough decision. The team laid off includes different people working on the technical side, as well as HR and other day-to-day company tasks like accounting. Denny has shared a detailed Excel File for anyone looking to hire them and making it a little bit easier for their job hunt. Denny also mentions in his statement that additional details about the challenges and potential opportunities in the industry will be shared in a future update.
https://t.co/fLnBgiLRso pic.twitter.com/FBWk90y1m3
— Cloudhead Games (@CloudheadGames) January 5, 2026
Cloudhead Games has been working in the VR sector for 14 years. The studio took pride in being 100% remotely operated by its team. The studio started its journey back in 2013, and since then, it has released VR games like Heart of the Emberstone, Call of the Starseed, Aperture Hand Lab, and its most recent Pistol Whip. Pistol Whip is an award-winning physical action-rhythm game featuring film-inspired gunplay and beats. It was released back in 2019 for PC VR and PlayStation VR and was critically acclaimed at its release. The studio is currently working on an unnamed project, but it appears that a much smaller team will be completing its development moving further down the road.
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What are your thoughts on Cloudhead Games announcing major layoffs right at the start of the year? Let us know in the comments below.
