Paradox intends to unify its operations in Sweden, and stressed that its studios North America and the rest of Europe won't be impacted by the move.
Stellaris and Crusader Kings developer Paradox Interactive is closing its studios in Umeå and Malmö, resulting in 36 layoffs at the company.
In a statement sent to Game Developer, a company representative said Paradox will "initiate" the closure this year so it can consolidate development in Stockholm.
The company stressed that the decision will only affect its Swedish operations, and won't have an impact on its studios and offices in North America and the rest of Europe.
"We've made the difficult decision to initiate a closure of our studios in Umea and Malmo during 2023. Though both studios employ many very skilled professionals, we've concluded that our current set-up with decentralized development of our active franchises across our studios in Sweden is not the best long-term structure for us," said a Paradox Interactive representative.
"We believe that focusing development in Sweden and Stockholm, and thereby operating in fewer locations is, over time, a better option. Currently, our focus is on making the process as easy as possible for the 36 people who will be affected. We are currently negotiating with our unions to this effect, and as we are still early in this process we can't provide much more in terms of specifics."
Paradox has experienced a number of highs and lows over the past two years, with the company opening a new publishing label in 2022 but also coming under scrutiny after an audit found it has "clear problems" preventing and investigating misconduct.
While many of the studio's key franchises appear to be in good health–such as Cities: Skylines, which last year eclipsed 12 million lifetime sales–it's only been around 18 months since the studio chose to "sharpen" its production pipeline, resulting in several unannounced projects being tossed on the scrapheap.
"[We want] to ensure that the projects with the highest potential have the resources necessary for the best possible development," said Paradox CEO, Fredrik Wester, speaking at the time. Notably, Wester himself came under fire in 2021 after admitting to subjecting an employee to inappropriate behavior.
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