Add another line to the redundancy list: According to its most recent financial report, game engine maker Unity says it’s “likely” to lay off even more staff in the next few months, despite a 69% year-over-year increase in revenue this quarter. Another round of layoffs would bring Unity’s tally to four in just two years, previously cutting its workforce by 600 in May and confirming it would close over half its global offices. Previous layoffs occurred in January 2023 and June 2022.
Unity published its Q3 earnings report earlier this week, as spotted by The Verge. The report included a letter to shareholders outlining the company’s financial results and plans going forward to become “leaner [and] more agile,” which we all know by now is code for mass workforce cuts. The letter says the company has undergone a “comprehensive assessment of our product portfolio to focus on those products that are most valuable to our customers,” and is “evaluating the right cost structure that aligns with the more focused portfolio.” Unity says “final decisions” based on this assessment will “likely include discontinuing certain product offerings, reducing our workforce, and reducing our office footprint.”
While Unity didn’t confirm exactly when any potential layoffs would occur, the letter confirmed the company was “acting quickly” and expected to begin implementing the plan within this quarter, with “interventions” to be completed “before the end of the first quarter of 2024.” This timing would place any workforce reductions between now and March 2024, if Unity’s timeline is airtight and job cuts do, in fact, go ahead.
Unity has had a particularly bumpy year and a half between previous workforce cuts and the controversy surrounding its ‘Runtime Fee’ in September, which would charge developers for each install (and re-install) of their game. Community outcry was massive, with many developers swearing off the engine should the fee materialise. The fee was pretty quickly walked back as Unity “regrouped” on the matter. Only a month later, CEO John Riccitiello stepped down, although the planned pricing structure wasn’t cited as a reason for his departure – but given the timing, it’s likely to have been a contributing factor.
In the results report, Unity noted that “while we did not expect the introduction of the fees to be easy, the execution created friction with our customers and near-term headwinds.” Despite this, the company says the “friction” didn’t “materially impact” financial results this quarter, with “a potential benefit from this change over the long term” still expected – although the “ultimate impact” of the negative response to the Runtime Fee debacle “remains uncertain.”
It looks like Unity staff will have to brace themselves for impact as the potential of yet another round of layoffs looms in the near future, adding to the ever-growing pile of games industry job losses that have been nearly weekly news at this point. When the wave of workforce cuts will finally slow is uncertain, but it’s clear that 2023 has been a rough year industry-wide and seems set to only get tougher, at least for a while.
Lead Image Credit: Unity
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