Key Takeaways:
- Don’t Nod has entered French safeguard proceedings — similar to Chapter 11 bankruptcy — after the Paris Business Court approved CEO Oskar Guilbert’s request on October 19/20.
- A new STJV union report today describes mass layoffs gutting the studio, calling it a “massacre” — with character artists, concept artists, environment artists, sound designers, programmers, game designers, level designers, producers, testers, and dev-ops all let go.
- Management intends to finish in-development game P14 by pivoting to outsourced development, but the union and industry observers doubt this is feasible given the scope of cuts.
- CSE (employee representative) negotiations are ongoing and end November 3.
- Don’t Nod had just €8 million in cash by July 2026, with survival beyond January 31, 2027 in serious doubt without new financing.
One of the French games industry’s most distinctive studios is fighting for its life. Don’t Nod — creator of Life is Strange, Remember Me, Vampyr, Banishers: Ghosts of New Eden, and most recently Aphelion — is now in safeguard proceedings after months of escalating financial distress, and a damning new report from French games union STJV paints a grim picture of what’s happening inside the studio right now.
The union published its account today, describing what it says is a devastating wave of redundancies — and raising serious doubts about whether management’s plan to salvage the situation is remotely workable.
What Safeguard Proceedings Actually Means
The Paris Business Court granted Don’t Nod CEO Oskar Guilbert’s request to open safeguard proceedings on October 19/20. Under French law, this is a preventive insolvency procedure — roughly comparable to Chapter 11 bankruptcy in the United States. It freezes the company’s liabilities, stays enforcement actions by creditors, and gives the studio time — initially six months, extendable by another six — to formulate a continuation plan while remaining operational under its existing leadership.
Guilbert framed the move in a statement as “proactive” and described it as a framework to “build a sustainable solution, while continuing our operations and preserving the value of our assets, our projects, and our expertise.” The court has appointed a judicial administrator to oversee the restructuring process.
The reality behind those measured words is considerably harder, as the STJV report makes clear.
The STJV Report: What’s Actually Happening Inside Don’t Nod
The union’s account, based on claimed knowledge of an internal memo from CEO Oskar Guilbert and what is happening in CSE (employee representative) proceedings, describes an extremely broad cull of the studio’s workforce. According to the union, virtually every key production discipline has been let go: character artists, concept artists, most environment artists, most sound designers, game designers, level designers, programmers, producers, testers, and dev-ops.
“To compensate for this massacre and keep on running with production on a game that, to this day, didn’t cut down on its scope and is keeping around a hundred persons busy, management is betting it all on outsourcing,” the report states. “Managers, who are usually seen as more competent and experienced than non-managers, are kept within the organisation and studio management expects them to orchestrate the massive shift to outsourcing as well as take over the workload of the fired team members. Anyone with a little experience with video games production and sanity understands how out-of-touch such a plan is.”
The union is scathing about the viability of continuing development on the in-development game codenamed P14 under this structure. That game — still unannounced — was previously described as Don’t Nod’s next major project, and the studio had committed to completing it even as the wider restructuring took place.
The union also reports that affected employees are not being offered voluntary redundancy schemes or meaningful severance packages beyond the bare legal minimum. “It’ll be the strict legal minimum and you’ll be glad for it,” the report says of what management is offering.
A Studio Driven Into a Wall
The STJV doesn’t spare Don’t Nod’s management in its assessment of how this situation developed. “This company has been driven into a wall for years, against all outsider wisdom, against any sort of reality-based assessment,” it states. The report describes two years of employees “living on the edge, in uncertainty and anxiety, all of it reinforced by internal comms that alternated between inexistence and outright lies.” It says the CSE documented six workplace accidents in 2026 and has recently launched an inquiry into what the union describes as a serious and imminent danger to workers’ health.
“They do not care about the damage it deals to employees’ health, they made no risk prevention plan. Employees feel like hostages to a radicalised management, who keep playing with the livelihood and the future of 140 people with no care for the consequences of their actions.”
The CSE negotiations are ongoing and end on November 3.
How Don’t Nod Got Here
The timeline of decline is stark. Don’t Nod had €15.4 million in cash at the end of 2025. By July 2026, that had fallen to €8 million. Revenue in the first half of 2026 dropped 56% year-on-year to €6.1 million, with a €4.3 million EBITDA loss and a €7.1 million net loss. Without new external financing, survival beyond January 31, 2027 is described as genuinely uncertain.
The proximate cause of the collapse is the failure of the studio’s most recent game. Aphelion, a sci-fi action-adventure about two characters hunted across an alien planet, launched in late April 2026 on PC, PS5, and Xbox Series X/S. Reviews were mixed — the game earned a “Mixed” rating on Steam — and commercial performance came in significantly below what Don’t Nod needed. Both Aphelion and P14 also failed to meet external financing criteria, despite reported interest from external parties.
This isn’t the studio’s first crisis. Don’t Nod had already gone through earlier waves of layoffs and restructuring — including cuts at its Montreal studio responsible for Lost Records: Bloom & Rage — and the STJV had been escalating its response throughout 2024 and 2025, calling strikes and demanding serious engagement from management. The board voted to enter restructuring in September 2026, and safeguard proceedings followed a month later.
Worth noting: Tencent purchased a minority stake in Don’t Nod in 2020, giving it a seat on the board. The Chinese conglomerate reportedly declined to inject additional short-term capital when asked, which accelerated the studio’s cash crisis.
What Happens Next
Don’t Nod says it intends to press on with P14, relying on outsourced development to compensate for the gutted in-house team. Whether that’s achievable — given how many specialist roles have reportedly been eliminated — is the central question the union is asking, and it’s one the studio has not yet answered convincingly.
The safeguard period gives Don’t Nod up to 12 months to build a continuation plan before the situation must be resolved one way or another. Finding new external financing within that window is the only realistic path forward. Eurogamer has asked Don’t Nod for comment.
For a studio that produced some genuinely original games over nearly two decades — from the original Remember Me to the Life is Strange series to Banishers — what’s happening at Don’t Nod right now is one of the starkest examples of the wider financial fragility afflicting mid-tier game studios throughout 2026.
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