Nintendo of America is restructuring the small army of contractors that helps test its games and hardware in its Washington state headquarters, the company confirmed to Kotaku. According to four current and former contractors, the result is a massive downsizing that comes amid layoffs across the rest of the video game industry and after the Mario maker reportedly delayed the launch of a “Switch 2" successor until 2025.

“These changes will involve some contractor assignments ending, as well as the creation of a significant number of new full-time employee positions,” a spokesperson for Nintendo told Kotaku in an email. Contractors at Nintendo of America who feel undervalued and underpaid have long called on the company to make them full-time “red badge” employees instead of exploiting loopholes in seasonal work requirements. While some of them are now finally getting converted to direct hires, others, including testers with over 10 years of experience, are getting the boot, though Nintendo says everyone impacted will receive severance packages.

When contacted for comment, a spokesperson for Nintendo provided the following statement.

Nintendo of America (NOA) has reorganized its Product Testing functions to drive greater global integration in game development efforts. The changes will also better align NOA with interregional testing procedures and operations.

These changes will involve some contractor assignments ending, as well as the creation of a significant number of new full-time employee positions. For all assignments that are ending, the contractors’ agencies, with NOA’s support, will offer severance packages and provide assistance during their transition.

For those contractor associates who will be leaving us, we are tremendously grateful for the important contributions they’ve made to our business, and we extend our heartfelt thanks for their hard work and service to Nintendo.

It’s not immediately clear how many total employees will be let go or not have their contracts renewed. According to four current and former employees, the restructuring could affect over 100 contractors, and most of those being converted to full-time status appear to be getting moved out of software testing. This would be the first mass layoff at Nintendo since even larger-scale cuts across competitors in the console space like Sony and Microsoft earlier this year, though it doesn’t appear to impact any existing full-time employees.

The shift also comes during a recent “lull” in Nintendo of America’s testing department, three contractors told Kotaku. They said there had been no new major first-party games in the testing pipeline, and none of them were aware of anyone having hands-on time with the upcoming Switch 2, despite previous hopes that it would arrive as early as the second half of 2024. They also weren’t sure how Nintendo of America could continue to test massive games like last year’s The Legend of Zelda: Tears of the Kingdom, which was praised for its technical performance and lack of bugs, with the new cuts. Nintendo declined to comment on the status of its testing pipeline.

According to an initial report by Brazilian journalist Pedro Henrique Lutti Lippe, which was later corroborated by VGC, Eurogamer, and Bloomberg, the Switch 2 was recently delayed until early 2025. VGC reported that the change was to give Nintendo more time to support the new console launch with big first-party games, similar to how The Legend of Zelda: Breath of the Wild, Mario Kart 8 Deluxe, and Super Mario Odyssey all helped build the Switch into a sales juggernaut within its first year.

Update 3/27/2024 1:16 p.m. ET: Added more information about existing full-time employees not being part of the layoffs.