I can't speak to gaming specifically, but in IT, there was a big shortage and companies were really panic hiring. Everyone was thinking, "If I don't hire everyone I can, my competitors will".
Recruiters were cold calling people not even looking for a job. I had multiple meetings with higher ups at companies where I never even applied. The conversation was, "Here's the various jobs we have open, what interests you?". It was kind of comical at times. Salaries were going up and up, and already those kinds of jobs can add up.
I have to imagine some of that happened in gaming. General IT are starting to see layoffs now too, though nothing quite like the gaming industry. IT always has bigger salaries and a few cuts can always go a long way to cutting costs unfortunately.
I think you mix in the live service bubble bursting plus other CIO bad decisions, you get this. Hopefully it will be a short term thing and not a massive downturn. Console sales are still strong, it isn't like people aren't buying games. I think these companies just invested in the wrong direction, and of course they can't just pivot when they spend years making something.
I'm guessing it will take time for companies to admit that the live service bubble burst and that Destiny was/is unsustainable. Go back to making single player games with reasonable scope and sell copies. They can still make battle passes and stuff where it works.