Avalanche Studios has announced a restructuring that will lead to the closure of its UK location, impacting staff in its Swedish branches as well. The studio, recognized for the Just Cause franchise, had been developing an Xbox-exclusive title named Contraband, which has now been canceled by Microsoft.

The company’s statement indicated that the decision was influenced by various current challenges facing both Avalanche and the gaming industry as a whole. They noted, “After a thorough review, we reached the difficult decision to make adjustments to our team structure and locations. This means we will be closing our Liverpool studio and beginning a consultation process in compliance with UK regulations, affecting all employees there. Additionally, similar changes will occur in our studios in Malmö and Stockholm to better align our teams with the demands of our games.”

Although the announcement did not directly reference the cancellation of Contraband, it acknowledged the shifts necessary within the organization to maintain their commitment to delivering exceptional gaming experiences to their dedicated player base.

Contraband, a cooperative smuggling-focused game, was first unveiled in June 2021 during the Xbox and Bethesda Games Showcase, but very little content has surfaced since then. The official trailer for the game has since been removed from the studio’s website, although the footage can still be viewed on various platforms.

The cancellation of Contraband followed a series of layoffs at Microsoft in July, which also saw several other projects, including titles from The Initiative and Rare, being scrapped. Despite these developments, Microsoft’s CEO, Satya Nadella, expressed confidence in the company’s performance, attributing its success primarily to advancements in AI.

Earlier in 2024, Avalanche Studios had commenced a collective bargaining agreement with Swedish labor unions, which was set to take effect during the second quarter of the year. Stefanía Halldórsdóttir, CEO of Avalanche, emphasized their commitment to enhancing the workplace culture within the gaming industry, stating efforts had been substantial in previous years.