Unity announces largest workforce reduction, lays off 25% of staff

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Unity, the powerhouse behind the popular game engine, has set in motion a significant reduction in its workforce, targeting about 1,800 employees, constituting a quarter of its current staff.

The decision follows the ‘company reset’ initiated by interim CEO Jim Whitehurst in November, a move aimed at streamlining operations and sharpening core business functions. This marks the fourth round of layoffs since July 2022 for Unity. Last year’s turbulence, sparked by an attempt to introduce a new pricing policy, led to a developer uproar and a notable decline in share value. In the aftermath, former CEO John Riccitiello retired, and Whitehurst, former IBM president, stepped in as interim CEO and president.

Founded nearly two decades ago by three Danish engineers, Unity revolutionized game development with its versatile ‘game engine,’ now driving its shares up by almost 40% since the reset announcement.

As reported by Business Today, the reason behind these fresh layoffs reflects Unity’s efforts to restructure and refocus on its core business, aiming for sustained, profitable growth. While the precise financial impact remains uncertain, the company anticipates substantial costs in the first quarter of 2024, primarily associated with employee transitions, severance payments, and benefits.

Unity isn’t alone in this industry shift. The gaming sector witnessed multiple waves of layoffs in 2023, affecting over 9,000 employees globally. Epic Games, the creator of Fortnite, announced a 16% reduction, impacting nearly 870 individuals. Ubisoft, known for blockbuster franchises like Assassin’s Creed and Far Cry, underwent corporate restructuring, resulting in the layoff of about 124 employees. Embracer Group made headlines through its acquisitions of gaming studios, media firms, and the IP rights to The Lord of the Rings. Additionally, EA streamlined its workforce, bidding farewell to roughly 780 employees, amounting to a 6% reduction. These strategic maneuvers across the gaming landscape underscore the evolving strategies of major players in the field.