Thunderful to lay off 20% of its staff in restructuring programme

18.01.2024 - 16:21 / thesixthaxis.com / Martin Walfisz / Lay Off

Thunderful Group has announced a major restructuring programme that will see around 20% of its workforce laid off in an effort to significantly reduce running costs and rebalance the business.

The company is aiming to reduce its headcount by around 20% in the next few months as part of a programme to reduce costs by around SEK 90 million ($8.6 million) to SEK 110 million ($10.5 million), as well as increase cashflow by a similar amount.

While we’re waiting for the full year financials, this could be an effort to roughly roll the business back to the size and running costs that it had in 2022. In September 2023 there were 525 employees, up from 459 the same time on year prior, and the wage bill had increased 47.4% as well to –98.0 million SEK (up from –66.5 milion SEK).

The restructuring is being led by new CEO Martin Walfisz, who was announced as the new boss in May 2023, and brought in a new leadership group in December. He blamed the decision on unsustainable investments and challenging market conditions from the last year, adding:

“Since I joined as CEO in the fall of 2023, we have evaluated the current business and the future position of Thunderful. To ensure and strengthen the viability of the Group, we have found no alternative other than to reduce costs and focus the business on areas with the best future growth and profitability prospects. It has been difficult to make these decisions, and it saddens me that we will have to say goodbye to many skilled colleagues and partners. Nevertheless, I am convinced that this is a necessary direction for Thunderful and that these changes will make the company a stronger player in the market.”

While Thunderful is best know for the various smaller and indie games that it makes and publishes through Thunderful, Headup, Zoink, Coatsink and more, the company also includes Swedish retailer Bergsala, and distributes a variety of other gaming and toy brands across Nordic countries, most notably Nintendo.

With rising costs, revenues and profits didn’t keep up in 2023, and the July-September quarter was particularly slow with only a few releases, most notably Viewfinder. It was the distribution and retail side of the business that was really able to pick up the slack at that time with significantly better EBITA, while games has much lower.

Still, Walfisz said in November that “the Games segment has great potential to be the major, long-term growth engine in Thunderful, but this requires us to clarify our strategies, develop our portfolio mix and improve our working processes.”

Thunderful is the latest game company to be going through layoffs and trying to cut costs, but I feel there’s a different tone to the changes here than elsewhere – Embracer in particular. Even so,