After three waves of layoffs last year, it might have seemed like enough
Unity Technologies’ downward spiral continues, as the company plans to lay off 25% of its workforce, or approximately 1,800 people, in what it calls a “company reset.” It is the largest layoff in the company’s history, larger than all three cuts made last year combined. More than 1,100 people were laid off in 2023, after at least 200 were laid off in June 2022. The layoffs come as Unity “restructures and refocuses on its core business, and positions itself for long-term and profitable growth,” according to a US Securities and Exchange Commission filing. According to Reuters, the layoffs will be completed by March.
Unity is well-known for its game engine software, which is used on games of all sizes, from independent titles to AAA blockbusters. It is the basis for games such as Hearthstone, Marvel Snap, Apex Legends, and Among Us. Aside from video games, it’s also employed in film and animation, among other fields. Despite its industrial dominance, the corporation is not profitable: In 2022, it earned more than $1.3 billion in revenue but lost money.
The layoffs began in 2022, but Unity’s issues grew worse in 2023 when it introduced a contentious new pricing scheme that was generally criticized by game creators. Unity proposed a fee collected for every game install after a particular income threshold was met when the new runtime pricing was introduced in September. After substantial criticism, including a boycott and a “credible death threat,” Unity withdrew its intentions. But the harm had already been done. Unity CEO John Riccitiello announced his resignation in October. The interim CEO is James M. Whitehurst, a Silver Lake equity investment firm advisor and former IBM president.
Unity competes with engines such as GameMaker, which saw a far larger price increase last year, and Epic Games’ Unreal Engine. The firm was created in 2005 as an engine for Mac developers, but it quickly grew in popularity due to its ease of use. In 2020, the company will go public. According to Reuters, the stock will reach $200 per share in 2021 before falling below $30 in 2023.
Its most recent layoff occurred in late November when it laid off 265 individuals when it shut down Unity’s Wt Digital division. Unity paid $1.6 billion to acquire Wt Digital in 2021. Unity also announced the closure of 14 offices in November.