Solana game developer Automata announces massive layoffs

"It is with a heavy heart that I write to you today to share news about the team restructuring efforts we are undertaking today," CEO and Co-Founder Michael Wagner wrote.

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Game developer Solana Automata (ATMTA) will undergo "significant downsizing" to preserve its ability to develop Star Atlas. After the restructuring, the Automata team will only have 45 employees, compared to 235 at the end of 2022.

Per the July 24 announcement on Discord, Michael Wagner, CEO and co-founder of ATTMA, said the restructured team will instead focus on “delivering SAGE and the recently announced Crew mobile app.” Meanwhile, development of a software development kit (SDK) combining Unreal Engine 5 and Solana will "resume at a significantly slower pace." The SDK serves as the basis for the Star Atlas game.

In explaining the changes, Wagner wrote that approximately 33% of the project's revenue was taken as an in-game Atlas token, which the team "holds tight." The token has lost around 80% of its value over the past year. More:

"We also had to pay a significant tax charge of nearly $30 million. And as many of you already know, we lost about $15 million of our cash with the collapse of FTX, which was a significant portion of our cash balance."

The developers said the team managed to recoup a "significant portion" of FTX funds in January, but the track remained "significantly reduced". Wagner also said the project was "unlikely" to complete an equity and debt financing agreement signed in January.

"It is a harsh truth that our current high rate of AAA-grade development is capital intensive and, at present, unsustainable without a significant change in business strategy."

At the same time, the Solana blockchain saw record usage in the first half of 2023. The network saw 100% uptime in the second quarter. The Solana Foundation introduced grants to support the ecosystem earlier this year.