- Unity Software announced it will lay off about 1,800 employees or 25% of its workforce as part of a corporate restructuring plan to reduce costs and streamline operations. This is the second major round of layoffs in less than a year.
- The layoffs are expected to be substantially completed in Q1 2024 as Unity looks to assess its product portfolio and reduce its workforce and office footprint. The company expects to take a substantial financial hit from the restructuring in Q1 2024.
- It’s been a challenging year for Unity with previous layoffs, leadership changes, financial struggles, developer backlash to pricing changes, and missed earnings expectations. The company now faces the difficult task of stabilizing its finances and rebuilding trust after a tumultuous year.
Unity Software, a leading gaming technology company, announced on Monday that it will be laying off around 1,800 employees, representing about 25% of its total workforce. This marks the second major round of layoffs at Unity in less than a year as the company looks to cut costs and streamline operations.
Details of the Restructuring Plan
In a regulatory filing, Unity stated that the layoffs are part of a corporate restructuring plan that aims to “comprehensively assess our product portfolio” and “reduce our workforce and office footprint.” The job cuts are expected to be substantially completed in Q1 2024.]
The company said it is unable to reasonably estimate the total costs and charges associated with the reduction at this time. Unity expects to take a substantial financial hit in Q1 2024 as the restructuring plan is implemented.
A Challenging Year for Unity
It’s been a tumultuous year for Unity. In May 2022, the company announced layoffs impacting about 600 employees or 8% of its workforce. This was intended to drive “long-term and profitable growth,” according to Unity at the time.
In September, Unity made a controversial pricing change that angered many game developers. A group of developers spoke out publicly against the change in a letter, arguing it would hurt small and large developers and was made without industry input.
Leadership Changes
In October, CEO John Riccitiello stepped down along with his role as Chairman. He was replaced by former Red Hat CEO James Whitehurst as interim CEO. Additionally, Roelof Botha, a Unity board member, became Chairman.
Financial struggles also plagued Unity in 2022. The company missed analyst expectations in Q3 and declined to provide guidance. The stock dropped nearly 50% between July and October.
The Way Forward
Unity now faces the difficult task of righting the ship and restoring confidence in its business after a tumultuous year filled with layoffs, leadership changes, developer backlash, and financial disappointments. With 1,800 additional layoffs in the works, Unity is clearly committed to major cuts in a bid to boost profitability. However, it remains to be seen if these measures will be enough to stabilize Unity’s finances and rebuild trust across its core gaming customer base.
