They’re no longer “employees”, the entire teams are now “seasonal help” during “we need to make a game” season. A handful are chosen to remain on staff after the season ends to deal with any patching that might need done, and then also let go once that seems taken care of.

The studio doesn’t need game developers during the “make lots of money” season. Once the money is in and divided fairly between the executives and any share holders and it becomes “we need to make a game” season again they will hire game devs and let them know that due to the current economy studio finances are very tight at the moment so regardless of experience level they’re hiring everyone in as entry-level and to not expect raises, but that once the new game is released there will be great bonuses in store for all devs who are employed with them at that time.