More information has spilled out regarding the massive Bungie layoff announcement on Wednesday, and the company was allegedly in serious trouble before Sony bid.

It has been a pretty turbulent week at Bungie. A second mass layoff wave was announced on Wednesday (bringing the total number of employees cut to ~320 since November 2023), and the fallout from the announcement has continued. A new report from Game File‘s Stephen Totilo alleges the Destiny 2 developer misrepresented its finances before Sony’s $3.6 billion purchase. Game File’s sources even go as far as to say, “Alternate history is insolvency.”

Without the Sony purchase, The Witch Queen from February 2022 may have been the actual Final Shape. According to Totilo’s sources, Bungie repeatedly missed financial targets following the Sony acquisition, which led to the initial November 2023 round of layoffs.

On top of the alleged misrepresented funds and the ongoing calls for Ceo Pete Parsons to resign, another report has come out of VGC, claiming that two industry veterans who have been with Bungie for decades, Creative Director Luke Smith and VP of Destiny Mark Noseworthy, ‘left the company’ as probable casualties of the “leadership restructuring” Parsons mentioned in the layoff open letter. This news comes from Giant Bomb’s Jeff Grubb, who made an X (formerly Twitter) post clarifying his stance.

Grubb also insisted both veterans left when the unreleased project, Payback, was placed on the shelf in mid-June. Totilo reaffirms that even if The Final Shape was a massive success, this round of layoffs was inevitable. As there is continued backlash against Bungie, Sony, and CEO Pete Parsons especially, more info on the Bungie pitfalls will likely come out soon. Fans can check out the entire Game File article here.