Saturday, December 2, 2023

Unity does not raise its head and prepares layoffs

As if 2023 hadn’t been problematic enough for Unity, the outlook for 2024 seems to be just as complicated. In its most recent financial report, the company told shareholders that it expects to implement several “interventions” at the operational level, which would include the dismissal of part of its staff.

For now, Unity has not specified a number of employees it could do without, nor has it specified which area could be most affected by a staff cut. However, the message is clear: profound changes are coming in the short term to reduce operating costs.

“Several weeks ago, we began a thorough evaluation of our product portfolio to focus on those that are most valuable to our customers. We are also evaluating the appropriate cost structure that aligns with the most focused portfolio.(…) This is likely will include the discontinuation of certain product offerings, reducing our workforce and reducing our office footprint,” the company reported.

Beyond possible layoffs and the closure of some offices, Unity does not provide details on what products it might stop offering. Nor does it make direct mention of the failed implementation of a new pricing policy, but it is logical to think that the new strategy be a direct consequence of it. Or that, at least, it is used as an excuse to justify the new determinations.

Unity would cut its staff, in its plan to reduce costs

According to Unity, the changes will begin to be implemented starting in the current quarter, with the goal of completing them before the end of the first quarter of 2024. So, if the layoffs do indeed proceed, they will surely be reported in a few weeks.

It remains to be seen if this sort of operational restructuring is enough for Unity to find some peace after a tumultuous 2023. The company is paying the consequences of a headless strategy. Let us remember that, in mid-September, those then led by John Riccitiello announced that They would begin to charge a commission to the developers every time someone installed a game developed with their graphics engine.

The rejection of the measure was immediate. Several independent studios launched a boycott against Unity and announced that they would migrate to another graphics engine. Meanwhile, more extreme events also occurred, such as the closure of the company’s offices due to the appearance of death threats.

The case forced Unity to rethink its initiative, apologize and modify its new pricing policy. However, the damage had already been done. It was therefore not surprising when, just weeks later, Riccitiello resigned as CEO of the firm. The curious thing was that his departure was masked as a retirement, although he did not convince public opinion.

Since then, James M. Whitehurst serves as interim CEO. “We are committed to creating value for our customers and shareholders. Our success is tied to the success of the creators who use Unity,” he stated in his letter to shareholders. We will see how possible layoffs impact his management.

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