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2023 and 2024 have been ruinous for the game development community, with widespread layoffs striking every corner of the industry. At the time of this writing, over 10,000 jobs were lost in 2023 and 2024 is rapidly gaining on it. One name that kept cropping up in relation to the layoffs was Embracer Group, a conglomerate that had been acquiring studios left, right and sideways only a few months prior but was now one of the key figures behind the overwhelming layoffs.
The Embracer Group released its interim third-quarter financial report today, providing a better understanding of the full scope of the company’s “restructuring” efforts. Despite having cut 8% of its workforce, or 1,387 jobs, Embracer said it’s still not going to meet its debt reduction goals. It’s also warned that the bloodletting isn’t finished.
CEO Lars Wingefors shared in the financial report, “As part of the restructuring program, Embracer still has a few larger structured divestment processes ongoing that could strengthen our balance sheet and further reduce capex. Processes are in mature stages. Certain companies might initiate restructuring before any divestment is announced. Our overruling principle is to always maximize shareholder value in any given situation. We are unlikely to reach the restructuring program target of below SEK 8 billion in net debt by March 31.”
Embracer’s restructuring comes after a reportedly failed $2 billion deal with Savvy Gaming Group, first announced in June 2023 as Wingefors emphasized the company’s efforts to strengthen its cash flow generation and leverage its portfolio of IPs to become a stronger entity and set out on a stable future to build greater games.
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The people and games affected by Embracer’s restructure
Embracer said in the press release, “In a group-wide effort, our companies and studios have had to make difficult decisions, particularly on parting ways with team members. In total, we have reduced our global headcount by 8% of the workforce since the start of the program. The reductions are managed locally on the operative group level with a focus on informing affected employees first, and then carried out with compassion, respect and integrity towards those affected.”
These layoffs resulted in the closure of Volition, Campfire Cabal, and Free Radical, as well as at least four other studios. The financial report also reveals the axing of 29 unannounced game projects and the impact of closures and layoffs on various game studios and game projects.
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