Unity Technologies’ downward spiral continues as the company plans to cut 25% of its workforce – or around 1,800 employees – in what is being dubbed a “corporate reset.” It’s the game engine maker’s biggest layoff, bigger than all three of last year’s cuts combined. More than 1,100 people were laid off in 2023, This was preceded by at least 200 layoffs in June 2022
The layoffs will be completed by March. according to a Reuters report.
Unity is known for its game engine software, which is used across the industry for games of all sizes – from indie games to AAA blockbusters. It serves as the basis for games like Hearthstone, Marvel Snap, Apex LegendsAnd Among us. In addition to video games, it is also used in the film and animation industry, among other things. Despite its ubiquity in the industry, the company is not profitable: it has earned more than $1.3 billion in sales in 2022
The company’s large-scale layoffs began in 2022, but Unity’s problems grew larger in 2023 when the company announced a controversial new pricing model that was widely endorsed by game developers. The new term pricing was announced in September, with Unity proposing a fee per game install that would be charged once a certain revenue threshold was reached. Unity ultimately withdrew those plans after widespread backlash, including a boycott and a “credible death threat.” But the damage was done. Unity CEO John Riccitiello resigned in October. James M. Whitehurst, a consultant at stock investment firm Silver Lake and a former IBM president, has been named interim CEO.
Unity is a competitor to engines like GameMaker, which made a much more popular pricing change last year, and Epic Games’ Unreal Engine. The company was founded in 2005 as an engine for Mac developers, but expanded outward from there; It is a popular choice due to its ease of use. The company went public in 2020. According to ReutersThe stock reached $200 per share in 2021 but fell below $30 in 2023.
The latest layoff occurred in late November, when the company cut 265 employees as part of the closure of Unity’s Wētā Digital division. Wētā Digital was acquired by Unity in a $1.6 billion deal in 2021. Unity also announced in November that it would close 14 offices.