Developers that fire staff after a project is completed are hurting not only individual team members but the business as a whole, says Double Fine’s Tim Schafer.

Speaking with Wired, Schafer expressed his dismay at the hire/fire cycle that has become the norm in the games industry, regardless of whether a game meets sales expectations or not.

“One of the most frustrating things about the games industry is that teams of people come together to make a game, and maybe they struggle and make mistakes along the way, but by the end of the game they’ve learned a lot – and this is usually when they are disbanded,” said Schafer.

“Instead of being allowed to apply all those lessons to a better, more efficiently produced second game, they are scattered to the winds and all that wisdom is lost.”

Schafer claimed that the practice sent the wrong message to employees, had a negative effect on games down the line.

“After Psychonauts, we could have laid off half our team so that we’d have more money and time to sign Brütal Legend,” he said.

“But doing so would have meant breaking up a team that had just learned how to work well together. And what message would that have sent to our employees? It would say that we’re not loyal to them, and that we don’t care.”

“Which would make them wonder ’Why should we be loyal to this company?’ If you’re not loyal to your team you can get by for a while, but eventually you will need to rely on their loyalty to you and it just won’t be there.”

According to psychologists, knowing that a round of layoffs is possibly approaching has large effects on employee productivity and well-being.

“The threat of layoffs can have a huge impact on employee morale, stress levels, and well-being,” said organizational and workplace psychologist Dr. Ronald Riggio.

Although some employees put in a productivity boost in an effort to keep their jobs, “others may simply give up, or the stress and worry takes their minds off of their jobs so that they make mistakes and under-perform,” he said.