When employees showed up for work on Friday, September 21st, at Telltale Games, there was nothing to suggest the day would be different than any other. The second episode of The Walking Dead’s final season would ship the following week; developers across multiple teams were busy with plans for in-progress titles.
But only hours later, 250 people would find themselves with no job, no severance, and health insurance that would be gone by month’s end — just nine days.
The woes of Telltale Games have deep roots. Earlier this year, The Verge published a report detailing years of nonstop crunch culture, toxic management, and frustration from developers who believed the company’s refusal to diversify gameplay had led to creative stagnation. After the company dismissed controversial co-founder and CEO Kevin Bruner in March 2017, former Zynga SVP and GM of games Pete Hawley stepped in as Telltale’s CEO in September. Then, in November 2017, 90 employees — roughly 25 percent of Telltale at that time — were laid off.
Although those employees were granted pay until the end of 2017 and given time to say their goodbyes, the hundreds impacted by the September 2018 layoffs were not so lucky. Former employees who spoke to The Verge say they were asked to leave the building within 30 minutes. Lack of severance meant that countless developers living paycheck-to-paycheck in the pricey Bay Area were left with no way to pay their rent. Many were devastated by the impending loss of health care for them and their families; employees on work visas may soon be forced to leave the country. In at least one instance, sources say that an employee had recently relocated cross-country to take a job at Telltale. Others had started as recently as that week.
These sources, who were granted anonymity in order to speak freely and without fear of retribution, paint a consistent picture of a company desperately struggling to keep its head above water. Despite what they see as the best of intentions on behalf of those running Telltale, hundreds still tumbled into unemployment with no safety net from their company.
The morning of September 21st, management informed employees there would be a last-minute company-wide meeting — the sort of event that was typically scheduled far in advance. “Immediately my thought was, this is either really good that they had to call an emergency meeting, or it’s really bad,” one former employee says. Some developers bumped plans around their current projects to attend.
Then the whispers began. Back up your work. Get your portfolio ready. Some wondered if the layoffs from November were about to be repeated.
By 11:30AM, the staff had gathered for what would be a very short announcement. “You can tell the office was off,” one former employee says. “That sort of energy just spreads around, you know?” Co-founder Dan Connors had come to attend the meeting — an oddity that had many fearing the worst.
CEO Pete Hawley, typically energetic and on his feet during meetings, was somber. “I have to sit down for this one,” multiple sources recall Hawley saying. “I’m afraid our journey ends today.” After a year of trying to reinvent itself, Telltale had run out of money. “I’ve never [heard] that room so silent,” one source says. “You [could] hear a pin drop.”
The news only got worse. Telltale’s head of HR told employees that because of the company’s financial strain, employees would not get severance pay. Some remained stoic at the news, while others began to cry. One source tells The Verge that half of their monthly income was dedicated to rent alone. “I was living paycheck to paycheck.”
Employees were told that they’d have health care until the end of the month. “The way that it was said was that it was almost like an assurance,” the source says. “‘Don’t worry, you have health care until the end of the month.’ I just remember thinking, ‘Fuck, that’s only nine days. What the fuck am I gonna do after that happens?’”
Everyone was given a folder with unemployment information and less than an hour to leave. “It was over in half an hour,” the source says. “Some loitered for a bit after to get their immediate belongings and say goodbye, but it was pretty quick. It was like a ‘one and done’ sort of thing.”
Telltale was in a financially and creatively precarious situation during its final year. Ask any of its employees and they’ll tell you the same thing: its problems were a shock to no one. The developers at Telltale were as desperate for change as the company’s most vocal critics.
“We knew about more problems than the public would ever be exposed to,” says one former employee. “A lot of us believed in the company and tried desperately to turn the ship around, but the inertia of poor decision making from the top was too much to overcome.”
Pete Hawley’s entrance into Telltale as CEO was the company’s attempt to right its sinking ship. Hawley had been brought in specifically to get the company back on track financially. Sources say he cleaned out toxic members of the team and raised wages. They describe him as having a refreshingly hands-off approach, one that allowed the creatives at the studio to be in charge of their work.
“[Hawley] came into a situation where the staff needed a strong leader with a clear vision,” says a former employee. “Telltale was strained, starved of fresh ideas, and needed to pivot hard toward reinventing itself. We needed someone who could communicate an ethos that would galvanize the employees into believing that Telltale had room to correct its course.”
For many developers, initial wariness of Hawley faded as Telltale’s culture improved. “The company I left on Friday [September 21st] was very different from the company I started working at,” says one former employee. Telltale was moving toward a healthier, more stable place. “Larger problems don’t get fixed overnight. There were certainly a lot of people who were cynical about it. But many departments had seen vast improvements for the better.”
“the inertia of poor decision making from the top was too much”
For some at the company, Hawley did not bring about the radical changes they had hoped for; one employee described the company’s direction under him as “business as usual” on a fundamental level: “Make an expensive deal with an IP holder, aim for an unrealistic deadline that forced us to rush production, and hope we cross the finish line without burning out.” In the end, the company was unable to recoup financial stability.
Sources point to many pain points that ultimately lead to Telltale’s closure. It was widely known to employees that the company was in need of financial support. “That wasn’t a secret,” one former Telltale dev says. “It was something that Pete [Hawley] told us pretty much since he joined the team last year. ‘This is why I’m here. I’m here to get us money so we can keep making great things.’” Telltale’s games had also been underperforming for some time. Although preorders for Telltale’s The Walking Dead’s final season were initially promising, the game hadn’t sold as well as expected.
In its initial statement about the majority studio closure, Telltale pointed to “insurmountable challenges” over the past year. “One of those challenges had to do with our partners losing trust in us,” one former employee says. In June, TechRadar broke two stories of upcoming high-profile projects: Netflix would bring Minecraft: Story Mode to its service, and Telltale was working on a new game based on Stranger Things. “The information leaks earlier this year affected us very negatively.” Other Telltale sources echoed this sentiment, with one pointing specifically to legal fees due to the leak. “Was this what shut down the company? Absolutely not,” one says. “Years and years and years of terrible management, childish optimism, ego, and everything Kevin Bruner caused this. But it certainly didn’t help.”
The studio was also entangled in a lawsuit with former CEO Bruner regarding his expulsion from the company, which Telltale described as “an apparent means of extracting revenge on a company already under financial strain.”
The final nail in Telltale’s coffin, however, was the loss of potential investors, who “dropped out last second,” one source says. On Thursday, two companies decided against investing in Telltale. When contacted by The Verge, one of the two companies, AMC, declined to comment. The second, according to Variety, was South Korean mobile game company Smilegate. “We were told that one backer pulled out like at 2PM on Thursday and the other at 7PM on Thursday,” a former Telltale employee tells The Verge. “It was immediate. It was bam bam, both of them backed out.”
”The truth is there was no money”
According to several sources we spoke with, employees were under the impression that deals were “all but signed.” In meetings about the potential investors, one says, “we were told it was essentially done. It was a done deal and it would be fine. And if one backer pulled out then the other was ready to jump in and sign with us. I guess they didn’t plan for both of them.”
An AMC source with inside knowledge, however, seemed surprised that AMC might have been considered a done deal. AMC did weigh the possibilities of investing, according to that source. However, its primary interest remains in The Walking Dead TV show; AMC has never been involved with Telltale’s take on the world.
Telltale’s greatest failing may have been its overconfidence. Developers emphasized to The Verge repeatedly that despite the challenges, they were under the impression the company could survive until at least the year’s end. “Management was so optimistic that very many people there honestly believed that we could reinvent ourselves and truly return to greatness,” one source says. Many former employees say that new projects were expected to save the company, if they could only have finished them. “It is still bullshit, however, and if the company was in trouble, some warning would have helped a lot of people,” adds another source.
Why Telltale’s management was so blindly confident — or even deceptive, as some sources surmise — is a mystery to the people who worked there. Some pointed to the company’s habit of not sharing information with employees unless it was positive. “There was a huge lack of foresight — anyone could have told you Walking Dead 4 was not going to be a hit — and they failed to keep employees in the loop because top talent was already jumping ship left and right.”
”The truth is there was no money,” one says.
Although a skeleton crew remains to finish Minecraft: Story Mode, no one The Verge spoke to sees Telltale’s layoffs as anything but the end. Telltale is dead. Former employees were unsure how the remaining developers were chosen to wrap the project, which the company calls an effort “to fulfill the company’s obligations to its board and partners.” Those still working on Minecraft: Story Mode expect that once that project wraps, “they’re probably going to be laid off next.”
Since the layoffs, the studio has announced it may still find a way to release the final episodes of The Walking Dead’s fourth season. The news is conflicting for many former employees. One says that if Telltale’s partners want to finish the game, “that’s a separate issue from Telltale being able to continue on as a company. Whatever decisions they choose to make at this point for the license holders, that has nothing to do with us.” Another referred to the news as “nonsense,” adding that it’s impossible to switch teams and expect any consistency. “It’s also insulting to think that paying severance wouldn’t be the absolute highest priority in terms of next steps,” the source tells The Verge. That sentiment has been echoed by vocal critics across the games industry, including developers like God of War’s Cory Barlog.
One dev describes the news as a difficult space to mentally exist in. “On the one hand, you want that content to be seen,” a former employee says. “You want your friends, you want your coworkers’ very, very hard work, to finally see the light of day… At the same time, hearing that someone else might come in and finish it — the other part of me is feeling really shitty about that.” The former employee worries about whether or not those who crafted the final season will be compensated. “They can’t pay rent on exposure,” the source says. “Those people who were on the team, the people who made that content might not be able to get back on their feet.”
According to a report from Kotaku published yesterday, Telltale is negotiating a deal with another company that would use former staff on contract to finish The Walking Dead.
Confusion abounds about the company’s messaging around its status, but as several former developers note, they were instructed to list their reason for unemployment as a company closure on official papers. One former employee is suing Telltale as part of a class-action lawsuit for allegedly violating labor laws. According to the lawsuit, the company is in violation of the WARN Act, which stipulates that employers must give advance written notice of at least 60 days before mass layoffs.
Following the layoffs, advocacy group Game Workers Unite released a statement in support of those who lost their jobs. “The executives at Telltale are incompetent,” it reads. “They are exploitative. They knew that this was coming and failed to warn anybody.” The organization adds that unionization is key to creating better conditions for workers.
“Unionization can’t fix Telltale after the fact, but it could have prevented so much of the damage to countless workers’ lives by ensuring benefits like severance pay and healthcare that lasts from job to job,” Game Workers Unite adds. “We cannot continue to just be reactive to these events, it is a losing battle. We can’t just send out job lists after every major studio closure. We have to be proactive. “
“They can’t pay rent on exposure”
Telltale’s official channels did not respond to requests for comment on this story; CEO Pete Hawley declined to comment due to legal reasons. “We’ll have things to say soon about all the topics you raise,” he tells The Verge. “There is a story to be told, based on truth, facts and how we ended up in this terrible situation. Much of which has not been told.” When contacted by The Verge via phone, co-founder Dan Connors declined to comment.
More than a week after layoffs, the shock has worn off for many of Telltale’s former employees. In its place remains a despondency for projects that will never be finished, and teams that were split apart. “A lot of us who worked there, we really did love our company and we really believed in it and the projects we were working on,” says one. “I think that excitement turned into the kind of optimism that made some of us blind to the red flags.”
“No one, not a single person, expected to come in on a regular day and be told that the company was done. We thought we would at least have the opportunity to finish this season of The Walking Dead, at least be able to ship the project we were working on. We honestly thought if we could do that, then things would be fine.”
“we really believed in [Telltale] and the projects we were working on”
As displaced developers pick up the pieces, many emphasize that Telltale was not a faceless, corporate entity. It was a band of passionate, dedicated people — many of whom are now without jobs, insurance, or a means to support themselves in one of the priciest parts of the United States. “The things that you love are made by people,” says one. “We’re people just like you. We’re people that are living paycheck to paycheck, working our asses off to make the content that you love. Enjoy the content that you have ... but don’t forget the people that made it.”
Telltale, once a proud testament to the power of narrative-driven storytelling, is now mourned as a loss of monumental talent and potential. Even as former employees voice their frustrations, they’re quick to reiterate their love of their work and belief in the company. The studios’ impact on the industry is widespread, from former developers moving into independent ventures, to other studios improving on a formula it modernized and made popular.
But after a sudden closure that left so many employees blindsided and financially vulnerable, Telltale’s legacy is shaping up to be something different. The studio may be remembered for how it ended as much as the games it left behind. “This is not how you treat employees, this is not how you treat people, and managers and execs out there can expect an official game dev union to be legal and formed within a few years,” one former employee says. “I have no doubt. This will go down as one of the straws that broke the camel’s back.”