Embracer Group Has Laid Off 904 People Through Q3, Reduces Some Debt, but Restructuring Continues

16.11.2023 - 18:21 / mmorpg.com

Embracer Group released its latest financial report, which included updates on how their restructuring is going so far. With debt down to about $1.4 billion, there’s still more to go, even after laying off a confirmed 904 people so far.

The company ‘s Q3 report showed an increase in sales, up by 13%. That $1.4 billion (SEK 14.6 billion) in debt reported is down by 31% from a year ago. This, of course, is one of the reasons that Embracer Group has been on an aggressive restructuring and cost-cutting move for months now. Those 904 people and several shuttered or reassigned studios later, were the cost of these savings. However, the total job losses for the year so far will be higher, since layoffs at companies like Cryptic Studios, Zen Studios, and Digic came after the close.

With a $2 billion dollar deal falling through with a Saudi company, the fast-paced tear of acquisitions under Embracer switched to a period of cost-cutting. After these improvements to their balance sheet, they also detailed some of their next phase.

The first phase was more or less cutting jobs and companies under their portfolio. The second phase will likely include some more of that, but the main focus is on projects in development across its vast holdings. In addition to seeking more external funding for development, they’ve also canned 15 games.

“In total, 15 mainly unannounced projects, were written down across Amplifier, Freemode, Gearbox, PLAION, Saber, and THQ Nordic,” the report notes.

The company’s report claims that they expect to reach their goal to have their debt down to SEK 8 billion, which is about $757 million USD, so there is still much cutting and course changing left. The focus is on new paths in PC and console development, as “Our operations within Mobile, Tabletop and Entertainment & Services provide a solid foundation with predictable, profitable and cash-generative businesses”.

So what does this mean for PC and console? 

“Over the past two years, our internally developed games have had an ROI over twice as high c ompared to externally developed games. We are striving for a structure which enables us to look at the future and invest in the right games with the right teams,” which means continued cost cutting, policy changes, and overall, a “leaner” and more efficient focus.

Read the report here.