nDreams reveals a strategic reorganization involving a "significant" reduction in workforce and the closure of two studios

UK-based virtual reality company nDreams is undergoing a major restructuring that involves a notable decrease in its workforce and the shutdown of two of its internal development studios. This decision was communicated to the employees today as a consultation was initiated.

In an official LinkedIn statement, nDreams disclosed that the layoffs would affect employees across all levels, including those in senior leadership positions.

The studios slated for closure are Near Light, based in Brighton and acquired by nDreams in 2022, and Compass, which was formed with 40 members last year after two other studios ceased operations in 2024. In total, 78 positions are under threat.

The company plans to concentrate its resources on the Elevation studio, which will maintain a workforce of around 120 staff members focused on undisclosed projects. Additionally, a smaller team will concentrate on XR research and development.

nDreams CEO Tom Gillo commented on the situation, expressing that the decision to restructure was difficult and not made lightly. He thanked the nDreams team, noting their contributions to creating a strong culture and producing influential VR games over the past ten years.

Despite the challenges in the current market, Gillo remains optimistic about the company’s mission and the appeal of the medium. He anticipates that the new proposals will position nDreams to continue developing cutting-edge, VR-centric, high-quality games and XR experiences for the foreseeable future.

The firm assured that it is committed to considering all possibilities to retain its talent.

The impending studio closures, set for 2024, will affect 17.5% of the company’s workforce, with the circumstances tied to the difficult VR gaming market. In another significant change, Patrick O'Luanaigh, who founded nDreams, stepped down from the CEO position last year after 19 years at the helm. The company was acquired by Aonic for $110 million in 2023.

This announcement is part of a broader trend affecting the VR industry. Earlier this year, Meta decided to close Twisted Pixel, Sanzaru, and Armature as it reduced its VR arm’s financial commitment. The tech giant also revealed plans to shift the focus of its Horizon Worlds metaverse from VR to mobile platforms, while still aiming to support third-party developers and maintain its VR investments long-term.