Video game studio's layoff letter said AI-generated images made a 3D artist's post unnecessary; court held the dismissal fair, Madrid appeal ruling recounts
A Spanish video game studio that went from a profit in 2023 to losses of about 3.5 million euros in 2024, and had notified a court of its insolvency, opened a collective dismissal (ERE) on 30 October 2024 covering 13 of its 83 employees; an agreement was reached and the dismissals took effect in December 2024. According to a judgment of the High Court of Justice of Madrid as reported by EFE, Xataka and a lawyer's analysis, the dismissal letter given to a 3D artist said that images generated with artificial intelligence improved the visual quality of the studio's games and cut production time per scene, that it was adopting an AI-based production process, and that two senior 3D artists were therefore enough, so her post was abolished. The first-instance court held her dismissal fair and she did not appeal. The High Court's judgment 864/2026 of 8 October 2026 concerned a scriptwriter dismissed in the same procedure, whose letter did not mention AI: it dismissed her appeal, leaving her dismissal unfair but not void. Xataka says the letter relied above all on economic and productive causes, that the studio presented AI as a consequence imposed by its clients rather than as a direct cause, and that AI by itself does not justify a dismissal. The studio is not named and the judgment was not read.
AI involvement reported · Causal attribution alleged · 3 sources · Added 30/10/2026