It's more due to AI and/or the expectation of automation being able to reduce the workforce before that actually gets set up functionally. Also that tech companies are doing it to try and kick back against people demanding their wages increase with cost of living, so game devs are piling onboard with layoffs for the same reason.
It's not only that. Companies are getting richer and richer and they could easily afford LOTS of employees. Microsoft reached the trillion-dollar market cap and a few days later fired 1900 people
It's the same thing that happened in tech. People got used to the near-decade of essentially free money. Interest rates were low for a long time, so easy loans, and demands to endlessly/rapidly grow. Now the free money's gone and none of them know how to exercise discretion, so they "trim the fat" of their rapid growth.
That's what I was thinking too. Let's hope that happens. When these developers get freedom to make games without corporate overlords pushing for dumb things in games, really great innovative games seem to be made. Let's hope.
What are you talking about? Indie development studios spring up out of mistreatment at AAA studios all the time. Where do you think Supergiant, Second Dinner, and Frost Giant came from, for instance?