Knockout City studio Velan facing major layoffs

Velan Studios is in the early stages of a restructure due to the cancellation of a major upcoming project.
knockout city game shut down

Velan Studios, developer of Mario Kart Live and Knockout City, is set to undergo a major company-wide restructure and significant layoffs in the coming months, due to the unexpected cancellation of an in-development game project.

In a post on Twitter / X, Velan leadership confirmed 46 of its 121 employees were recently delivered notice that their positions may be impacted by a layoff in 60 days time. At the end of this period, employees will likely be let go, as Velan looks to secure itself into the future.

Per details revealed, the game cancellation was at the whims of an external studio partner.

“This is hard, but we can confirm that Velan Studios is in the early stages of a reorganisation that will most likely result in some amazing people, teammates, and friends leaving the studio,” Velan wrote. “This is a rough environment for a lot of indie studios, and like them, we are faced with some very hard choices.”

Read: Knockout City was shuttered due to inflation, low player retention

“A major project was suddenly canceled by an external partner, which means we may not be able to maintain our full studio size. Of the 121 current Velan Studios team members, 46 were given notice that they might be impacted by a layoff in 60 days. This is sad because we have an awesome team who are deeply passionate about their craft.”

Going forward, Velan Studios will be “doubling down” on its slate of current games, including some new releases set for 2024. Management is also currently working on securing new partnerships to “minimise the impact” of the cancelled game project.

There is hope that those notified of potential redundancy will have their notice rescinded in future, but for now, it does appear major change is imminent.

Velan Studios joins a long list of small companies forced to make sweeping redundancies in recent times, as funding and partnership opportunities slow to a crawl. Our thoughts are with those potentially impacted by the restructure at the studio.

Leah J. Williams is a gaming and entertainment journalist who's spent years writing about the games industry, her love for The Sims 2 on Nintendo DS and every piece of weird history she knows. You can find her tweeting @legenette most days.