Embracer CEO says layoffs are "something that everyone needs to get through"

gamesindustry.biz:

Embracer CEO Lars Wingefors said that the current reduction in workforce at the company and across the industry is "something that everyone needs to get through," later adding that the group's strategy has been to cut the things that have "the lowest chance of success going forward" and to only keep "the most iconic studios."

This conversation was part of the Q&A portion of the company's earnings call yesterday, as it announced its Q3 results.

Answering a question about the underlying games market, Wingefors said that the whole industry has been feeling a "significant shift" since last summer.

"More or less all companies are [going] through a restructuring program," he said, as transcribed by Seeking Alpha. "There is less investments made from the industry into content. I think the underlying consumer market is solid and is still growing, but the underlying changes – there's a lot of underlying changes made to the industry. That obviously affects all of us in the industry.

"I think looking at the 8% reduction in workforce [at Embracer], there is obviously – I don't know the number for the whole industry, but I think it's something that everyone needs to get through. I mean, as I said, it's more driven by the overinvestment in the previous years because everyone just put all capital into gaming and perhaps a bit too much capital in a few instances."

Embracer Group's chief strategy officer Phil Rogers told us in November that he considered the human cost of Embracer's restructure "significant" but "necessary." Since the restructuring program began in June, the group has laid off more than 1,400 people.

During the earnings call, Wingefors was asked about the company's contribution to the industry-wide situation, as the company went on a M&A spree in 2020 and 2021 before announcing its restructuring last year following the collapse of a $2 billion deal, leading to a wealth of studio closures.

One investor highlighted how Embracer's number of projects in development dropped by