When a studio like Bioware, Halo Studios layoff hundreds of employees, the chuds rejoice and the progressives get all 'well achtually' on us. The truth is they are both right, but pointing to correlations, rather than the actual mechanism.
If say a company publishes a woke game, it cost $50 million, but made only $40 million it seems like it bombed. But no it didn't, it did fantastic ...for the scumbags on the board. Because they fire the dev team (that was going to happen regardless), and now on the expenses sheet of operating revenue it's near zero's accross the board (they keep the managers to carry little bits of knowledge).
So the money they set aside for runtime costs are all free cash (for the managers and the board).
'but dude! It's still -10mn, where did the cash come from?'. It came from the previous game, and a few pennies from merch, investors etc. The point is, operational cost, becomes operational profit.
So as long as they take this into account, even in a shitty industry they'll make money, because they'll automate more with AI, fire more dudes more quickly and use cheaper contractors.
In other words, mass layoffs were always planned.