Pathfinder creators Paizo have $10 million of inventory stuck in a warehouse somewhere because of Diamond Comics, forcing it to lay off staff

It's rare that, when I talk about layoffs in the gaming industry—be it videogames or TTRPGs—that I do so with sympathy for the company dropping the axe. Usually it's down to short-sighted business practices or greedy, dollar-eyed acquisitions. Not so this time—at least, not directly.

Paizo, the creators of Pathfinder 2e (which has stolen my heart away from D&D in recent years) has had to lay off 12 members of staff.

Per a statement on the publisher's site, it has a lot to do with Diamond Comics. In case you missed it, Diamond Comics filed for bankruptcy back in July last year, screwing over many of the companies that had given it stock by liquidating said stock to try and pay off its creditors—ie, not the people who paid for that stock in the first place.

Back then, Paizo CCO Erik Mona wrote: "We’ll be ok, but it’s a giant pain in the ass and blows our annual budget to shit."

The statement almost one year later lays the blame squarely at Diamond Comics' (and, indeed, JP Morgan Chase's) feet: "JP Morgan Chase claimed a lien on all products stored in Diamond’s warehouse, including nearly $10 million in Paizo inventory. We cannot currently access this inventory, pending ongoing litigation."

Paizo also explains that "Diamond’s exclusive contract prevented us from immediately moving to a new distributor, even after they stopped selling our books. A judge terminated that contract earlier this year, but Diamond has appealed, delaying resolution.

"The result has been devastating. Paizo lost nearly $2 million last year, had to write off nearly half a million in additional sales covered by the bankruptcy, and book‑trade sales remain far below historical levels. While sales through Paizo.com and hobby retailers have grown over the same period, they have not been sufficient to offset these losses."

Again, I wouldn't normally be defending a company putting 12 entire people out of a job—and I'm still not exactly doing that. We should probably live in a system where livelihoods don't vanish because of forces beyond workers' control.

But the financial difficulties Paizo finds itself in really don't seem like its fault. Especially since, compared to someone like Hasbro, Paizo is a pretty generous publisher, allowing everyone access to all of Pathfinder 2e's rules for free—save for its pre-written campaigns and adventures. All of the monsters, classes, magic items, etc in those adventures have always been readily available.

It also, y'know. Hasn't been sending ominous letters to anybody trying to unionise—as a matter of fact, Paizo's been working with its union to provide those impacted with decent terms, including an 18-month recall period, a time where those laid off can be expected to be offered their positions if Paizo's financial situation improves without needing to reapply.

I'm more comfortable in taking that stance, also, after seeing a lack of animosity (but no less heartbreak) between Paizo staff and its management, directly from an employee's mouth. Avi Henriques, lead editor at Paizo, writes on Bluesky:

"I appreciate everyone who has been rightfully not blaming Paizo as a company for this turn of events … It is very, very difficult to wrap our heads around the fact that we have worked hard and at such a high level for years, only to be punished by situations that we had absolutely no control over."

In other words, a tragic set of bureaucratic legal nonsense and financial irresponsibility appears to've put 12 people out of work, from a TTRPG company that really couldn't deserve it less. It's a sad day.

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