Summary
Following its latest quarterly earnings, theEmbracer Grouprevealed that it has laid off 904 employees as part of its restructuring process. 2023 has been a troubling year for the company, especially after the fallout of a reported$2 billion deal with Saudi Arabia. While its latest earnings report indicates the situation may be improving, Embracer’s issues appear far from over.
Back in June, the Embracer Group announced that it was going to restructure to reduce the company’s SEK 16.7 billion ($1.51 million) debt. This meant several canceled projects, studio shutdowns, and layoffs across the company, with some of its highly-anticipated titles like theKnights of the Old Republicremake now in limbo. The company was even reportedlyconsidering selling offBorderlandsmaker Gearbox Entertainment. Either way, the biggest casualty of the company’s proceedings has been its workforce, where a significant number of its employees have been let go.
RELATED:Embracer COO Is Leaving the Company
According toEmbracer’s quarterly report for Q2 FY 2023/24, the group has laid off 904 of its workers during the three months ending September 30. The reduced headcount represents about 5% of its workforce with the company mentioning that the “program is expected to continue” toward the end of its fiscal year and to “reduce capex to a run-rate of around SEK 5 billion into FY 2024/25.” The layoffs come from Crystal Dynamics, Gearbox Publishing, and Beamdog studios along with the shutdown of Campfire Cabal and Volition Games. However, this number will be higher since Embracer has laid off staff from Digic, Zen Studios, and Cryptic Studio as well.
Interestingly, the Embracer Group posted a 13% year-on-year rise in sales to SEK 10.8 billion ($1 billion) during the quarter. Its net debt has shrunk 31% year-on-year to SEK 14.6 billion ($1.4 billion) and states that the company is on track to halve it by April next year. TheTomb Raiderowner has also canceled about 15 “mainly unannounced” projects while indicating that more closures/buyouts are on the way. Time will tell how much further this will impact the group’s ambitions, particularly considering how Embracer had over 220 projects in active development back in June.
Of course, it isn’t just theEmbracer Group, as 2023 has been riddled with layoffs across the gaming industry. Withjob cuts from Sega’s Relic Entertainmentto the likes of Bungie and Ubisoft, there have been over 6,000 layoffs in the gaming industry during the year. It’s unclear how soon the situation might take a turn for the better.
