Cloudhead Games Layoffs: Severance Rights & Employee Guide

Cloudhead Games (Cloudhead) is laying off approximately 70% of its 56-person workforce, effective Jan. 7, 2026. (Bluesky)

“The general downturn of the gaming industry, VR’s still nascent challenges, including a lack of platform funding have placed us in an impossible position,” CEO Denny Unger said in a social media post.

“While we’ve done all we can to reinvest in our people and VR’s future from prior successes, we can’t build ‘bigger swings’ alone.”

Unger added that 16 individuals will remain at the Vancouver Island-based video game developer following the job cuts.

If you’re laid off or receive a severance offer, don’t sign anything until you understand your full rights under Canadian employment law.

Cloudhead Games Severance Pay: Key Employee Facts

If you’re a non-unionized Cloudhead employee in Canada, you may be entitled to up to 24 months of severance pay when fired or let go.

How Severance is Calculated?

Several factors determine what you’re owed, including:

• Age
• Length of service
• Position or seniority
• Ability to find similar work (job market conditions)

Is Your Severance Package Fair?

A proper and fair severance package must cover:

• Salary
• Bonuses & commissions
• Benefits & pension contributions
• RSUs, stock options, incentive pay
• Vacation pay & allowances

Not Always Called a Layoff

In some cases, Cloudhead (and other employers) avoid calling a workforce reduction a “layoff” by:

• Cutting pay
• Reducing workplace responsibilities
• Reassigning employees

If you find yourself in this situation, these changes may qualify as constructive dismissal — which is legally treated the same as a termination and may entitle you to full severance pay.

Severance Success Stories – Our Track Record

We’ve negotiated significant results for employees at major corporations, including:

• ✅ 24 months’ severance for a long-term professional after refusing unfair new terms post-acquisition. See our win →
• ✅ 6 months’ severance for a short-term executive pressured to sign an unfair release after termination. See our win →
• ✅ 4 months’ severance for an employee terminated after just eight months in a senior role. See our win →

Our clients are often surprised by how much they’re legally owed after being wrongfully dismissed — and legal fees are often covered by the employer.

FAQs on Cloudhead Games Layoffs

Lost Your Job? Get Help Now

If you’ve been impacted by layoffs at Cloudhead Games in Canada, don’t sign anything before seeking legal advice.

At Samfiru Tumarkin LLP, our track record speaks for itself:

• 👥 50,000+ Canadians successfully represented
• 💰 Millions secured in severance payouts
• ⚖️ Over 99% of cases settled out of court
• ⭐ 3,000+ 5-star Google reviews
• 🏆 Named one of Canada’s Best Law Firms

📞 Call us at 1-855-821-5900 or request a consultation online.

Disclaimer: The materials above are provided as general information about the rights of non-unionized employees in Canada. It is not specific to any one company and SHOULD NOT be read as suggesting any improper conduct on the part of any specific employer, or a relationship between Samfiru Tumarkin LLP and a specific employer.