Unity Buys Another Company As Staff Fumes Over Massive Layoffs

Game-engine maker Unity said it plans on acquiring Ironsource, an ad tech firm, in a press release this morning. The news comes just two weeks after a wide round of layoffs rocked the company, where remaining employees are not exactly thrilled with the strategy.

Unity will merge with Ironsource, which they describe as a — and brace yourself for a word salad from the press release — “leading business platform that empowers mobile content creators to turn their apps into scalable, successful businesses,” in an all-stock deal. Once complete, Ironsource will become part of Unity’s operation, its CEO nabbing a seat on Unity’s board.

Perhaps best known for producing a widely-used game engine — a set of creation tools used to make video games — with the same name, Unity has gone on a bit of an acquisition spree over the past few years. Last year, Unity bought Weta Digital, a visual effects company that’s worked on films like Avatar and The Lord of the Rings, for $US1.6 ($2) billion. It also purchased the game-streaming platform Parsec for north of $US300 ($416) million.

This spending strategy has not offered a ton of job protection to existing staff. Last month, Unity laid off 4 per cent of its workforce, totaling hundreds of staffers across departments. Following the layoffs, employees questioned and expressed frustration about the company’s priorities, according to internal Slack logs viewed by Kotaku.

“My issue is not with those companies, or any staff in those companies — you guys rock!” one employee wrote in a Slack channel following news of last month’s layoffs. “My issue is having the gall to pretend that we [are a] company with values like ‘in it together’ when staff can be fucking thrown aside.”

It’s unclear what protections, if any, are in place to prevent Ironsource’s workforce from facing a similar fate. Representatives for Unity and Ironsource did not respond to requests for comment in time for publication.

Ironsource represents a shift in Unity’s strategy, seeming to show a company that’s prioritising profits over product. Former acquisitions have generally had something to do with video games, whether it’s the VFX expertise of Weta or the multiplayer netcode savvy of something like MLAPI, which Unity acquired in 2020. Ironsource is purely about monetisation.

“The general mood at the company is that the whole company, at this point, has been horrifically mismanaged,” another former employee told Kotaku, speaking under the condition of anonymity. (Based on employees I’ve spoken to, this seems to be the general sense. One even told me their department didn’t have any deadlines.)

Following last month’s layoffs, executives declined to answer questions like, “Have execs ever discussed their exorbitant pay scale and potential reductions to save the workforce?” the former employee said. “I’m guessing that yes, they did, but dismissed it as they wanted that new beach house in Malibu.”