Crytek eliminates five studios after struggling to pay employees

Less than one week after it came to light that a former Crytek employee was raising funds to finance legal action over unpaid wages, the company has announced plans to close five of its seven studios, so that it can "refocus on its core strengths of developing innovative games and game-development technology." 

Crytek will maintain its operations in Frankfurt and Kiev, while studios in Budapest, Sofia, Seoul, Shanghai, and Istanbul "will not remain within Crytek," according to the announcement. It's not made clear whether those operations will be shuttered outright, sold off, or given the opportunity to continue to operate independently, as the release says only that "management has put plans into action to secure jobs and to ensure a smooth transition and stable future." 

The closures come in the wake of rumors that Crytek has once again been struggling to pay its employees. Former FX artist Ludviq Lindqvist, who quit the company and announced his intent to file a lawsuit after going without pay for two months, said in his crowdfunding campaign (which now appears to have been canceled) that salaries for all Crytek employees have been arriving late since May 2016. Complaints about late or missed payments have also been posted on Imgur and Glassdoor, and sent anonymously to Kotaku. 

"These changes are part of the essential steps we are taking to ensure Crytek is a healthy and sustainable business moving forward that can continue to attract and nurture our industry’s top talent. The reasons for this have been communicated internally along the way," Crytek managing director Avni Yerli said. "Our focus now lies entirely on the core strengths that have always defined Crytek—world-class developers, state-of-the-art technology, and innovative game development, and we believe that going through this challenging process will make us a more agile, viable, and attractive studio, primed for future success.”   

The announcement said Crytek's remaining studios will "continue to develop and work on premium IPs," which could suggest a move away from its plan, announced with great enthusiasm several years ago, to make exclusively free-to-play games. Whatever happens—and that's as specific as the release gets—it's a big blow to a studio that once seemed poised to become one of the industry's most influential developers, and even more so for employees who now find themselves out of work on the cusp of the holidays.   

I've emailed Crytek for more information, and will update if and when I receive a reply.