Unity, the maker of a widely used video game engine, has announced it will be laying off approximately 1,800 employees, constituting a significant 25% of its workforce. This decision comes as the company strives to enhance its financial performance following a challenging year.
Key Takeaway
Unity, the video game engine maker, is laying off 1,800 employees, which represents 25% of its workforce, as part of a restructuring effort to improve its financial performance.
The Background
Unity’s game engine has been the foundation for several popular games, including Cuphead, Ori and the Blind Forest, Hearthstone, Cities: Skylines, Hollow Knight, and Beat Saber. The company faces competition from Epic Games, the creator of Fortnite and the Unreal Engine.
The Restructuring Effort
According to an SEC filing, Unity is implementing these layoffs as part of a broader restructuring and refocusing on its core business to position itself for long-term and profitable growth.
Financial Implications
While the layoffs are expected to reduce the company’s costs, Unity’s stock has not seen significant movement, with a 0.62% decrease in pre-market trading compared to the previous day’s closing price. At $38.74 a share, the company’s stock remains notably lower than its all-time high of $201.12 in November 2021.
Prior Efforts
Last year, Unity undertook three rounds of layoffs and adjusted its fee structure for the engine in an attempt to improve its financial situation. This included changes to the pricing scheme for developers using the Unity engine.
Controversy and Consequences
These changes led to controversy and concerns among developers, resulting in a loss of faith in the company. Subsequently, Unity CEO John Riccitiello resigned, and the company announced a “reset” in November. The recent layoffs appear to be part of this broader restructuring effort.
