Embracer Group, once known for buying up game studios left and right, laid off more than 900 staff and shut down 15 unannounced games. Read about the reason for the layoffs and the future of Embracer.
Embracer Laid Off 904 Employees
Embracer’s Restructuring Plan
Embracer Group, the Swedish gaming giant known for having acquired several well-known game studios and publishers, announced the layoff of 904 staff members, roughly 5% of its workforce, over the course of 3 months. Embracer Group’s acquired studios include Borderlands developer Gearbox Software, THQ Nordic, and Crystal Dynamics.
The company declared that it was implementing a restructuring plan that would involve the shutdown of studios and other major cost cuts back in June. In the company's Q2 financial report, 713 internal developers and 191 external developers were laid off. CEO Lars Wingefors thanked all the employees he had let go and said:
"As you will hear today, we are determined to transform Embracer into a leaner, stronger company. That said, it’s painful to me that you need to leave the group, and we have been, and are doing, everything we can to preserve jobs without changing what we need to achieve."
Embracer’s Failed Investments and Previous Restructuring
Embracer Group’s financial difficulties emerged after a $2 billion deal with Savvy Games Group, a Saudi government-funded company, reportedly collapsed. This forced Embracer to make major cost reductions. The Swedish gaming powerhouse announced the collapse of the deal back in May. Had the deal pushed through, Embracer stated that it would have "$2 billion in contracted development revenue."
The fallout of the $2 billion deal, the acquisition spree, and the lack of return on investments from those acquisitions forced the Embracer Group to create a restructuring program. The first of which was the complete shutdown of Saints Row Developer Volition back in September due to poor sales and restructuring.
In addition to this, Tomb Raider developer Crystal Dynamics was forced to lay off 10% of their workforce to cut costs. It wasn’t soon after that Embracer Group announced that they’ll be letting go 904 employees and canceling 15 unannounced games from their various developers, specifically THQ Nordic, Amplifier, Freemode, Gearbox, Plaion, and Saber.
The Future of Embracer Employees
Despite the company's net sales increasing by 13 percent this year, Embracer Group said the ongoing restructuring “will lead to further headcount reductions” which means more layoffs in the future for internal and external employees. This is supported by insider reports that claim that Gearbox is currently up for sale with an interest from a number of third parties. The move is but yet another notch in the recent trend of layoffs in the gaming industry.
Source:
Embracer Interim Report
