Switch 2 Delay Fallout? Nintendo Confirms Testing Layoffs In Major Shakeup

According to Kotaku, Nintendo of America said its testing apparatus will "involve some contractor assignments ending, as well as the creation of a significant number of new full-time employee positions".
It does not appear that these contractors were testing the Nintendo Switch 2 yet, and were likely previously busy with the more recently released titles for the existing Nintendo Switch. But who knows—it's possible they were play testing early prototypes.

It is possible that Nintendo does not have too many major titles in the pipeline for a 2024 release, which would be one potential explanation for the diminished testing requirements. it is no doubt that the video game industry as a whole has experienced a significant number of layoffs in recent months, as the industry adjusts.
Nintendo has also been well-known for resisting layoffs, especially Nintendo of Japan. Its willingness to convert some of these laid off contractors to full-time employees is also a plus, keeping them within the Nintendo eco-system for when more activity ramps up.
While there is no definitive connection to layoffs or a release date for the Nintendo Switch 2 yet, it will be one of the most anticipated consoles as expected from Nintendo.