Rec Room is laying off "roughly half" of its workforce, less than four years after being valued at $3.5 billion

The company behind the social gaming platform Rec Room has announced it has laid off almost 50% of its employees. This decision was confirmed by CCO Cameron Brown, alongside co-founder and CEO Nick Fajt. Brown emphasized that the layoffs were not a reflection of the employees' performance, praising them as "some of the most talented people" they have worked with in the gaming sector. He also mentioned efforts to support those affected by the redundancies.

Brown issued a statement on the company's official blog (acknowledgments to GameDeveloper for the information). He conveyed the gravity of the decision, noting that many of the departing employees have played a crucial role in shaping the company's culture, developing features appreciated by millions, and enhancing the platform substantially.

He described Rec Room not just as a game or company but as a community. While expressing his regrets about the layoffs, he reiterated their necessity to ensure Rec Room's future viability and growth. The statement also highlights his desire to retain all affected employees if circumstances allowed but acknowledged they could not.

The company assured that the impacted staff would continue to receive pay for the next three months, along with health benefits for six months. Additionally, former employees will keep their computers to aid them in finding new employment opportunities.

The organization's recent heavy investments in creation tools for PCs, VR, consoles, and mobile platforms haven't reaped the expected successes. Brown acknowledged this approach wasn’t benefiting the team, company, or players, attributing responsibility to himself and Fajt. He described the situation as a chance to adjust and improve future strategies, although it remains a challenging period for all involved.

Founded in Seattle, Washington, in April 2016, Rec Room Inc. was started by a group of enthusiasts in VR, AR, and social multiplayer experiences. In December 2021, the company successfully raised $145 million, leading to a valuation of $3.5 billion. That same year, CEO Fajt announced a milestone, declaring a "record-breaking month" for user-generated content sales, as noted by Game Developer.