Due to financial restructuring, Embracer Group will be making big changes.
Embracer has been buying up companies left right and centre and has now announced a major restructure.
Over the past few years, Embracer has been engaging in a rapid series of acquisitions, resulting in a significant expansion of its operations.
The company now encompasses 138 in-house game development studios and operates in 40 countries.
Alongside the mentioned acquisitions, Embracer has also acquired Saber Interactive, the developer behind World War Z, Dark Horse Comics, the third-largest comics publisher in the USA, and Asmodee, a board game publisher.
According to Axios, Embracer reportedly invested $1 billion in 20 acquisitions during the previous year.
This impending restructure will reportedly include closing studios, cancelling games, and laying off employees. Embracer says this will leave them a “stronger, more efficient company.
On Tuesday morning, CEO Lars Wingefors made an open letter announcement, complemented by an investor webcast and a news release, regarding the restructuring.
As Wingefors explained, the restructure will be completed in three phases by March 2024. Under the general guise of cost savings and consolidation, the phases are meant to reduce debt below 10 billion Swedish Krona, or roughly $930 million.
The news follows the company’s unexpected collapse of a $2 billion deal in the last few weeks.
In the open letter, Wingefors said:
“Embracer currently engages close to 17,000 people and while that number will be lower by the end of the year, it is too early to give an exact forecast on this.”
As the former CEO of Saber Interactive and interim chief operating officer, Matthew Karch says, however, that the first phase of cost savings will be “immediate and noticeable.”
As part of the process, an unknown number of Embracer Group employees will be laid off. No specific date has been given for closures or layoffs by Wingefors or Embracer Group.
Embracer Group said the impacted projects have not yet been announced and have “low projected returns.”Karch said the studios to be closed had been “underperforming.”
We will keep our ears to the ground to report everything related to this restructure, which will undoubtedly affect numerous employees.