Unity Technologies' downward spiral continues as the company plans to lay off 25% of its workforce — or about 1,800 people — in a move it's calling a “business reset.” It's the game engine maker's largest layoff, bigger than all three of last year's cuts combined. More than 1,100 people were laid off in 2023, preceded by at least 200 layoffs by June 2022. Unity said in a U.S. Securities and Exchange Commission disclosure that the layoffs come as Unity “restructures and refocuses on its core businesses, positioning itself for long-term profitable growth.”
The layoffs will be completed in March. according to a Reuters report.
Unity is known for its game engine software, which is used across the industry for games of all sizes: from indie games to AAA blockbusters. It serves as the basis for games such as Hearthstone, Marvel Snap, Apex LegendsAnd Among us. In addition to video games, it is also used in film and animation, among other things. Despite its ubiquity in the industry, the company is not profitable: it earned more than $1.3 billion in revenue by 2022but made no profit.
Large-scale layoffs at the company began in 2022, but Unity's problems deepened in 2023 when it announced a controversial new pricing model that was universally panned by game developers. The new runtime pricing was announced in September, with Unity proposing a fee collected per game install after a certain revenue threshold was reached. Unity eventually backed down on these plans after widespread backlash, including a boycott and a “credible death threat.” But the damage had been done. Unity CEO John Riccitiello stepped down in October. James M. Whitehurst, an advisor at equity investment firm Silver Lake and former president of IBM, was named interim CEO.
Unity is a competitor to search engines like GameMaker, which made a much more popular price change last year, and Epic Games' Unreal Engine. The company was founded in 2005 as an engine for Mac developers, but expanded from there; it is a popular choice because of its ease of use. The company went public in 2020. According to Reutersthe stock reached $200 per share in 2021, but fell below $30 in 2023.
Its most recent layoffs came in late November, when it laid off 265 people as Unity's Wētā Digital division closed. Wētā Digital was acquired by Unity in 2021 in a $1.6 billion deal. Unity also announced in November that it would close fourteen offices.