Apologies - I linked the wrong article, take a look at this survey[0] where laid-off game devs can submit their work after being laid off for COVID-related reasons
Layoffs often happen once a game is shipped. Maybe they are getting that one game they were working on before the pandemic shipped, then laying a bunch of people off and rethinking their game plan.
Anecdata: I personally have been laid off from 3 different game studios, each time it was just after one of the games I was working on had shipped. I finally decided my dream industry was a little too dysfunctional to stay in it, and left it after the third time. I only make video games in my spare time, now.
Although I've worked for a few enterprise organizations since then, and so far I've seen nothing but dysfunction in them, too, so maybe it's just endemic all over. Like at my current company, which managed to drop from its all-time-high stock price a whopping 93% over the past year and a half, for many good reasons. But at least I get paid more.
Professional game development jobs are nearly always done on a project basis from "peak" with smaller teams for the patching and extended concept. Until the sales come in they may not know what they can or should try to launch next or be at a phase which can even use the "massed" labor.
But it doesn't really make sense for an industry that is seeing increased revenue to have a downturn.
I'd also be skeptical of that survey, there are a lot of people with game side projects that will do just about anything for exposure.