Photo: ArenaNet

ArenaNet, the studio behind the popular online games Guild Wars and Guild Wars 2, informed employees today that it is planning big layoffs, according to a person who is there. Although ArenaNet did not give out exact numbers, and they may not yet be finalized, rumors floating around the studio signal that a significant number of people will be let go.

Songyee Yoon, the CEO of Korean publisher NCSoft West, which owns ArenaNet, e-mailed employees this afternoon with the news. “Our live game business revenue is declining as our franchises age, delays in development on PC and mobile have created further drains against our revenue projects, while our operating costs in the west have increased,” she wrote. “Where we are is not sustainable, and is not going to set us up for future success.”

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Yoon added that the company plans to “cut costs across the organization” and restructure across the board, merging ArenaNet and NCSoft’s publishing divisions in the process. “The restructuring, cost-cutting, and strategic realignments are all being done to secure our tomorrow and to provide the foundation that will allow us to grow and acquire,” she wrote.

Later this afternoon, ArenaNet CEO Mike O’Brien plans to meet with staff to discuss the layoffs further.

Around 400 people work at ArenaNet, and for the past few years they’ve been working on a number of unannounced projects, according to one person familiar with goings-on at the company. However, that person said, slow development progress combined with a lack of new games in 2018 and 2019 has led to a financial squeeze. ArenaNet’s last release, the Path of Fire expansion for Guild Wars 2, launched in September 2017.

This news comes in the wake of widespread cost-cutting measures at NCSoft. Last September, NCSoft shut down Wildstar developer Carbine Studios, and earlier this year it began plans to reduce staff at the mobile studio Iron Tiger. In its financial earnings call earlier this week, NCSoft reported an annual decline in PC revenue.

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When reached by Kotaku earlier today, an NCSoft representative declined to comment.

UPDATE (6:02pm): ArenaNet management addressed employees directly in two meetings this afternoon, according to people who were there. There’s still no word on how many people will be laid off, and most employees are still in limbo as they wait to find out if they’ll be affected (although some who worked on canceled projects say they’re presuming they’ll be laid off and are making preparations accordingly).

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ArenaNet told employees it will be giving out severance of two months to anyone losing their jobs, as well as bonus time based on tenure with the company.