After years of expansion and the recent collapse of a $2 billion mystery deal, Embracer Group announces major layoffs and studio closures
Embracer has announced a «comprehensive» restructuring of its business, indicating that layoffs, game cancellations, and studio closures will be happening over the next few months. The goal is to get the group's debt under SEK 10 billion (just under a billion dollars) by the end of FY 2023/24 (i.e. next March), and the most sobering part of the announcement is its intent to cut overheads by at least 10% per year. Overheads in this context mostly meaning wages.
The company's announcement says the restructuring will include «the closing of studios and termination of projects that have not yet been announced and with low projected returns». CEO Lars Wingefors published an open letter in which he addresses the layoffs without putting a specific number on them:
«Embracer currently engages close to 17,000 people and while that number will be lower by the end of the year, it is too early to give an exact forecast on this.
»It is painful to see talented team members leave. Our people are what make up the very fabric of Embracer. I understand and respect that many of you will be worried about your own position and I don’t have all the answers to all questions. I want to be clear that the decisions about this program were not taken lightly".
The key elements of the restructuring are:
The company is reducing its investments in external development to focus «on internal development based on owned or controlled IP», while also seeking external funding for its largest internal titles.
«During the past years, Embracer invested significantly both in acquisitions and into a strategy of accelerated organic growth,» said Wingefors, and he can say that again. Last year it bought Crystal Dynamics, Eidos Montreal, Square Enix Montreal, and
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