[Updated: 29 March 2025]

It appears the contagion of layoffs, long endemic to Western game development, has now infiltrated Malaysia’s shores. Lemon Sky Studios, a prominent name in our local gaming scene, has reportedly downsized, leaving several 3D artists seeking new opportunities.

Over the past day, at least ten former employees—mainly from the 3D department—have taken to LinkedIn, announcing their sudden availability due to this downsizing. According to another report from Nmia Gaming, the downsizing was due to a lack of projects for the company and redundant roles, with staff being told about this in advance in a prior virtual townhall session by studio COO Dharmendra Magasvaran. 

This isn’t the first turbulence for Lemon Sky. In August 2024, both the CEO and Chief Creative Officer stepped down abruptly, signalling possible undercurrents of instability within the company.

Moreover, the studio has previously faced allegations concerning unpaid overtime and intense crunch periods. Reports from 2021 highlighted employee grievances about excessive workloads without corresponding compensation. Lemon Sky, however, refuted these claims, asserting adherence to Malaysian employment laws.

The current wave of layoffs raises pressing questions about the health of Malaysia’s gaming industry. Are we witnessing the onset of a troubling trend where job security becomes as volatile here as it is in Western studios? The hope was that our local industry could learn from the pitfalls experienced abroad, fostering a more stable environment for our talented developers.

The Beginning Of The End?

Unfortunately, Lemon Sky isn’t the only casualty in Malaysia this month. PlayStation Studios Malaysia was also hit with layoffs earlier this month, with around 20 employees—mainly from the art team and project management—being let go. This came as part of a broader reduction in PlayStation’s workforce, affecting multiple global studios. While the full extent of these cuts remains unclear, it suggests that even industry giants aren’t immune to the instability plaguing game development.

As we navigate these choppy waters, Malaysian studios must prioritise transparency and employee welfare. The gaming community here is burgeoning with potential; safeguarding its growth requires addressing these challenges head-on, lest we find ourselves mirroring the very issues we’ve observed—and hoped to avoid—in Western game development.

Do note that efforts to reach out to the affected individuals and Lemon Sky’s management for comments have so far been unfruitful. But as this is a developing story, we will be sure to provide updates if there are any changes.

[29 March Update]: An earlier statement included in this article was removed at the request of the person who shared it. We apologise for any inconvenience caused. Attempts to reach out to several former staff who were retrenched bore no response.