Developer Rec Room has issued a statement announcing layoffs at the studio, which are affecting "about half" of the team.

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Rec Room, the social VR gaming platform, laid off approximately half its workforce due to financial challenges. Despite raising $294 million in funding, the company struggled with technical complexities of supporting content creation across multiple devices (PC, VR, consoles, mobile) and managing millions of user-generated content pieces. The CEO cited unsustainable burn rates and low growth as key factors, while acknowledging recent record-breaking UGC sales. Affected employees receive three months of pay and six months of health benefits.

Developer Rec Room lays off 'about half' its staff