Rec Room, the developer behind Rec Room, a popular free-to-play user-generated content game, has announced that it will be laying off "roughly half" of its team. The layoffs are justified as necessary and painful cuts, given the trajectory of the company. The announcement post is rather lengthy, but the gist of it seems to be that the studio bit off more than it could chew and ended up spreading its developers too thin in an attempt to support content creation across too many devices. As part of the severance packages, the affected employees will be allowed to keep their laptop or desktop computers, and they will continue to receive their salaries and benefits for three and six months, respectively, after being laid off.

Along with the layoffs, Rec Room will be scaling back its support efforts to focus more on PC creators, which make up the bulk of the game's UGC creators. This means that the remaining development efforts will spend less time and energy working on tools for mobile, controller, and Maker AI. Rec Room will also slow the client release cadence, which is in accordance with previous efforts to move more of the game's key content out of the client and into the server. Rec Room launched in September 2021, and, according to SteamDB , its concurrent player count on Steam reached 7,154 in February 2022. Since then, it has steadily declined, with the daily player count hovering at around 900-1,500 players. Despite this, Rec Room claims in the layoff announcement update that players spent more on user-generated content in July 2025 than ever before.