Unity, the company behind a popular video game engine, is undertaking another round of layoffs, resulting in approximately 1,800 job losses. This decision comes as the company aims to enhance its financial performance following a challenging year.
The video game engine developed by Unity is widely utilized in the gaming industry, with notable games such as Cuphead, Ori and the Blind Forest, Hearthstone, and Cities: Skylines being created using Unity’s engine. Unity’s main competitor is Epic Games, known for Fortnite and the Unreal Engine.
According to an SEC filing, Unity states that these layoffs are part of a restructuring effort to refocus on its core business and establish long-term, profitable growth.
Despite the cost reduction resulting from these layoffs, Unity’s stock has only experienced a marginal decrease, with a 0.62% decline in pre-market trading compared to the previous day’s closing price. Currently, the company’s stock is valued at $38.74 per share, significantly lower than its all-time high of $201.12 in November 2021.
Last year, Unity implemented changes to its engine fee structure following three rounds of layoffs. This included a shift from providing free access to indie developers earning less than $100,000 annually, to introducing a tiered system where users would pay either $399 or $1,900 per user annually based on revenue brackets.
Subsequently, Unity faced criticism from developers and revised its pricing structure to offer companies with over $1 million in revenue the choice between a per-user fee or a 2.5% revenue share. These changes did not affect existing Unity games.
Following the pricing controversy, Unity CEO John Riccitiello resigned, with James Whitehurst, the former president of Red Hat, serving as the interim CEO. In November, Unity announced a company reset and today’s layoffs are likely tied to this restructuring effort.
