In a regulatory filing published on Monday, Unity announced plans to cull around 1,800 people, roughly 25% of its remaining workforce.
I say remaining workforce because this is the company’s fourth round of layoffs within the span of a year. According to Unity these are part of its ongoing efforts to restructure the company and put it into a position for long-term growth.
“Unity has made the difficult decision to implement a workforce reduction, targeting approximately 25% of our total workforce across all teams,” said Kelly Ekins, Unity’s director of PR.
“This decision was not taken lightly, and we extend our deepest gratitude to those affected for their dedication and contributions.”
The actual reality of the situation is that Unity has had a terrible year. The company attempted to introduce a new business model that included things like charging developers for every install of their game. The Unity Runtime Fee was going to affect every developer that met the minimum threshold and caused mass confusion due to it seemingly also effecting pre-existing games and due to questions like, ‘what if someone uninstalls the game and then reinstalls it? Does that count as an install?’
The backlash was biblical in proportion and caused Unity to quickly walkback at least some of its plans, such as the fees applying to existing games.
In a somewhat ironic moment, Unity’s plans caused developers and gamers to unite and fight back. Then CEO John Riccitiello ended up resigning from his position due to the mass controversy and was replaced by former IBM president James Whitehurst who is acting as interim CEO.
In November the company published its financials which confirmed what everyone feared: layoffs were coming. While Unity’s revenue was actually up 69% its net losses were still high, though it managed to halve them. Whitehurst blamed “doing too much” at the time and stated that their goal was to reset and “emerge as a leaner, more agile, and faster growing company”
Some interesting speculation online is that Unity might be trying to downsize itself in preparation to go on the market. I don’t think that’s the case though, as Unity is still the king in its market segment.
Looking through its numbers and statements, I admit to being a little baffled by Unity. It has bought up various other smaller company’s over the years and the resulting workforce wound up totalling 7,000, which does seem absurdly high when you think about it. Of course, that isn’t the fault of the employees, rather of the higher-ups who over expanded the business, heavily influenced by the Covid bubble where gaming saw a massive surge, and are now faced with the bubble bursting.
Regardless of the cause, I wish all the best to everyone facing the prospect of losing their job while Unity chases the impossible dream of infinite growth.
The even worse news is that it looks like 2024 maybe even worse than 2023.