Videogame Software Maker Unity to Lay Off 1,800 Employees Or 25% of Staff

Paresh Jadhav

12 months ago

Videogame software maker Unity Software revealed on Monday it will lay off 1,800 employees or 25% of staff in its largest round ever of layoffs, scheduled to conclude by March, according to regulatory filings and an internal memo seen by Reuters.

Its game engine is widely used by indie developers and larger studios alike, while recent years have brought significant turmoil for them – with indignant developers over new pricing policies only to later change them back.

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Unity Game Engine

Unity Game Engine, used by games such as Cuphead and GTFO, will reduce staff by approximately 25 percent through layoffs scheduled to conclude by March. These deep job cuts will affect all teams, regions, and areas of their business according to Unity, who told Reuters this news of this move was unexpected but was expected.

Unity announced a “company reset” last November following its termination of their agreement with Peter Jackson’s digital effects studio Weta FX and subsequent outrage over its install fee policy, leading to John Riccitiello stepping down as CEO and other changes being made to monetisation models.

This company has yet to release quarterly results for 2023 and revenue forecasts have been less-than-stellar. They expect their restructuring process will lead to a leaner, faster growing organization that remains focused on core activities while simultaneously improving long-term profitability.

It’s a corporation disaster

Unity Software has announced plans to lay off nearly one quarter of their employees, according to a securities filing seen by The Wall Street Journal. Unity offers software that helps developers make videogames, and this reduction in staff will allow it to “restructure and focus on core business.”

This latest round of layoffs follows multiple rounds since June 2022 and comes amid significant turmoil at the company, such as backlash to an initial plan in September to collect new fees on higher-selling games (an idea which was later scrapped).

Unity CEO John Riccitiello abruptly stepped down last October amid widespread outrage at the company’s management practices, and was replaced by former Red Hat CEO James Whitehurst as interim. Since then, laid-off employees have received severance pay and career transition assistance; plus 14 offices worldwide will be reduced as part of an overall plan to streamline operations.

It’s a short-term business strategy

Unity is a cross-platform game engine used by millions of developers worldwide to make video games. Since 2005 when it first debuted on Mac computers, Unity has since expanded to support Windows PCs, PlayStation consoles and mobile devices – even Apple Mac computers!

Last year, Amazon faced some difficult times after it announced plans to charge developers per install of games they created and published through its platform. Following widespread outrage at this move, they eventually reversed course on this controversial policy and former CEO John Riccitiello stepped down, with interim chief executive James Whitehurst later announcing “company reset”.

These latest layoffs are part of Unity’s restructuring effort and will impact teams from across its company. While Unity is a well-known gaming engine, its major competitors include GameMaker which recently implemented similar pricing changes; as well as Epic Games’ Unreal Engine with its cross-platform capabilities offering significant advantages in the market.

It’s a transitory period

San Francisco-based software maker Vlambeer, which develops video game creation software, has experienced several setbacks this year. After upsetting developers by rolling out and then partially retracting a pricing policy last fall, John Riccitiello resigned as chief executive officer in October.

James Whitehurst announced a “company reset,” including terminating an agreement with a visual effects company founded by “Lord of the Rings” director and closing offices. It remains unclear if additional job cuts will take effect beyond those planned in May, November and January.

Unity is the largest technology employer in Canada and the jobs at stake include both full-time and contract staff in Toronto and Vancouver. Non-unionized employees will receive full severance pay if laid off; additionally, Unity plans on decreasing its corporate real estate footprint by closing 14 offices worldwide as well as moving certain positions towards remote working.