All the layoffs were inevitable with the extremely obvious bubble in any computer related jobs. Same as dotcom bubble with a bunch of superfluous hires for superfluous tasks and ridiculous budgets that were not going to pan out. So yes now we'll have tons of unemployed programmers and art departments from companies overhiring for at least a decade.
It's a bit more than that with Kitfox involved, but I don't see why that makes him wrong. Greed kills a ton of creativity in games. Not just layoffs but over aggressive monetization and fear of innovation.
I know little about the game industry. I saw one person say it’s because of the high interest rates. Games cost so much to produce, they have to borrow most of it and the rates have screwed them.
The problem is capitalism, in general. But more specifically, it's the current era of capitalism where line must always go up. Growth must be infinite.