Unity cuts 1,800 more staff in ‘company reset’

08.01.2024 - 23:17 / polygon.com / John Riccitiello / Unity Ceo / James M.Whitehurst

The Unity Technologies’ downward spiral continues as the company intends to cut 25% of its workforce — or roughly 1,800 people — in a move it called a “company 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 in June 2022. Unity said in a United States Securities and Exchange Commission disclosure that the layoffs come as Unity “restructures and refocuses on its core business, and to position itself for long-term and profitable growth.”

The layoffs will be completed by March, according to a Reuters report.

Unity is known for its game engine software, which is used across the industry on games of all sizes — from indie games to AAA blockbusters. It serves as the foundation for games like Hearthstone, Marvel Snap, Apex Legends, and Among Us. Beyond video games, it’s also used in film and animation, among other industries. Despite it’s ubiquity in the industry, the company is not profitable: It earned more than $1.3 billion in revenue in 2022, but did not make a profit.

The company’s large-scale layoffs began in 2022, but Unity’s problems became larger 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 met. Unity eventually pulled back on those plans after widespread backlash, including a boycott and a “credible death threat.” But the damage was done. Unity CEO John Riccitiello stepped down in October. James M. Whitehurst, an advisor at the Silver Lake equity investment firm and former IBM president, was named interim CEO.

Unity is a competitor to engines like GameMaker, which made a much more popular pricing change last year, and Epic Games’ Unreal Engine. The company was founded in 2005 as an engine for Mac developers, but expanded outwards from there; it’s been a popular choice for its ease of use. The company went public in 2020. According to Reuters, the stock reached $200 a share in 2021, but dropped below $30 in 2023.

Its most recent layoff was in late November, when it cut 265 people as it closed Unity’s Wētā Digital division. Wētā Digital was acquired by Unity in 2021 in a $1.6 billion deal. Unity also announced in November that it was closing 14 offices.