Gearbox Hit With Layoffs Hours After Embracer Sale

29.03.2024 - 10:08 / gamerant.com / Pam K Ferdinand

Gearbox Entertainment has been hit with a wave of layoffs, mere hours after the game development company announced its pending acquisition by Take-Two Interactive. After recent rumors that the company was potentially up for sale, it was confirmed on March 27 that Embracer Group will be selling Gearbox for $460 million. This comes after nearly a year of the Swedish media conglomerate divesting itself, through sale or closure, of multiple subsidiaries to increase cash flow.

Gearbox is the well-known and esteemed game developer and publisher behind the extremely popular Borderlands franchise, with a film adaptation of the successful IP currently in the works. The company has grown substantially in the 25 years since its founding, expanding into four divisions that encompass not only game development and publishing, but also TV and film production. So, as Embracer actively works to reduce debt, it was unsurprising that Gearbox would be seen as a valuable commodity worth selling.

The announcement of Gearbox Entertainment’s sale to Take-Two was received positively, and many fans immediately began anticipating even greater things to come for the company. However, less than a day after the acquisition was confirmed, Gearbox staff began taking to social media to announce that they had been unexpectedly laid off. It’s currently unclear exactly how many employees have been impacted by the layoffs, but former PR Manager Jennifer Locke stated in her post that she had been let go “along with countless others,” leading many to believe that the numbers are significant.

Frequently in the game industry, when a company is acquired by another, it is not necessarily seen as good news by employees. This is because very often the transaction is followed by one or more rounds of layoffs as the purchaser attempts to offset the cost of the acquisition. This was most clearly seen after Microsoft’s purchase of Activision Blizzard for $68.7 billion in October 2023. Mere months after the deal closed, the Microsoft laid off more than 2,000 employees in multiple waves, and just days later, the tech giant hit $3 trillion in market value.

However, employee apprehension is not felt only after an acquisition. Working in the games industry can generally be an unstable vocation, with teams often sizing up to finish large projects and then immediately downsizing once the product ships. Staff also feels the effects fairly quickly if a game doesn’t perform well. For the past year in particular, the announcement of game studio layoffs, closures, and acquisitions have been made with unusual regularity. Hopefully, the uncertainty will settle down soon.