Avalanche is closing its Liverpool studio following Contraband’s cancellation

Avalanche Studios is closing its Liverpool studio and facing layoffs across the company following the cancellation of Contraband.

“In light of current challenges to our business and the industry, we have thoroughly reviewed how to best ensure Avalanche Studios Group’s long-term success,” reads a note posted on the studio’s website.

“This review has led us to the difficult conclusion that we must make changes to our staging and locations. As a result, we are proposing to close our Liverpool studios, and to initiate a collective consultation process, as required by UK law.

“This will impact all Avalanchers in Liverpool. The changes will also impact our other studio locations in Malmo and Stockholm, where we will reduce our workforce and restructure the teams to address our games’ needs.”

Avalanche is best known for the studio behind the Just Cause series, and Contraband was set to offer a co-op open-world game set in the 1970s.

However, although the game was originally announced with a cinematic trailer during E3 2021, nothing had been seen in the four years since that initial reveal.

It was then announced last month that development of Contraband was ‘on hold’, with Avalanche saying “active development has now stopped while we evaluate the project’s future” and that it would “give an update on what’s next as soon as we can”.

This is the latest casualty in Microsoft‘s widespread restructuring. Earlier this year, Microsoft’s gaming division confirmed it was making a fresh round of layoffs, with head of gaming Phil Spencer saying the cuts were designed to “end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness”.

Following the news, it was then confirmed that Microsoft had cancelled Rare’s long-in-development RPG Everwild, as well as Perfect Dark (along with its studio The Initiative).