There isn’t much of the games industry that hasn’t been impacted to some degree by the wave of layoffs it’s been suffering for more than a year at this point, but very few companies have contributed to that damage as much as Embracer Group has. Embracer announced an internal restructuring program in June last year after it failed to close a $2 billion deal with Saudi Arabia’s Savvy Games group, and since then, across all of its studios, it has laid off a startling number of people.
In fact, in its recent quarterly fiscal report, Embracer Group revealed that as part of its restructuring program, thus far, it has laid off 8% of its total workforce, which amounts to 1,387 job cuts. In November last year, that number stood at around 900, with the company having cut another nearly 500 jobs since then- a stark number that becomes even starker when you consider that the quarter ending December 31 was the most profitable one in Embracer Group’s history.
CEO Lars Wingefors says that the company’s restructuring program is approaching its “final stretch”, but says that it still has “a few larger structured divestment processes ongoing”, which might result in more layoffs in the months to come, adding that the company’s top priority is to “maximize shareholder value in any given situation”.
“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,” Wingefors said. “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. Certain divestments could significantly reduce net debt post March 31, 2024.”
One of the divestments that Wingefors is referring to could potentially be Borderlands developer Gearbox Entertainment, with reports claiming a few months ago that Embracer was suiting buyers for the studio.
Embracer Group’s restructuring program has resulted in the closure of a number of studios, including Saints Row developer Volition and TimeSplitters developer Free Radical Design. Meanwhile, multiple studios have suffered layoffs, including Crystal Dynamics, Fishlabs, New World Interactive, Lost Boys Interactive, 3D Realms, and Slipgate Ironworks.
As part of the program, Embracer Group has also cancelled 29 unannounced projects across all of its studios since last June. Recent reports have claimed that a new Deus Ex game was one of them.