Velan Studios, the developer responsible for popular games like Mario Kart Live: Home Circuit and Knockout City, is undergoing a reorganization that may lead to layoffs.

In a recent announcement on X, Velan Studios co-founders Guha and Karthik Bala disclosed that a major project with an external partner had been canceled abruptly. As a result, the studio is anticipating downsizing, with 46 out of their 121 employees being notified of a potential layoff within the next 60 days.

Velan Studios acknowledged the challenges faced by indie studios during these times, emphasizing the difficult decisions that must be made. They have vowed to provide support to affected team members in the event of layoffs.

Known for their successful titles like Knockout City, which received positive feedback and multiple seasonal updates, Velan Studios later transitioned the game into a free-to-play model after parting ways with EA. Unfortunately, the game ceased operations just a year after the shift and only two years following its initial release.

The news of potential layoffs at Velan Studios adds to a growing list of unfortunate industry layoffs in 2024, with over 8,000 jobs lost in the first two months alone. Major companies like EA, PlayStation, Embracer Group, and Microsoft have all made significant staff reductions, affecting developers and studios across the board.

From cancellations of anticipated games to strategic restructurings, the video game industry is currently navigating a period of uncertainty that is impacting employees at multiple levels.

It remains to be seen how Velan Studios and other affected companies will adapt to these challenges and support their teams during this difficult time.