Embracer confirms 900 layoffs following net sales upswing

gamedeveloper.com:

Swedish conglomerate Embracer Group laid off 900 people during the last three months after actioning a restructuring program designed to turn the company into a "highly cash flow generative business."

Those layoffs represent around 5 percent of Embracer's total workforce, and were made despite net sales increasing by 13 percent year-on-year to SEK 1.8 billion ($170.5 million) during Q2.

As noted in the company's latest fiscal report, Embracer CEO Lars Wingefors described that second-quarter performance as "stable."

"We expect to reach the forecasted range for this year. The free cash flow of SEK 0.4 billion shows a clear improvement compared to Q1," he added. "Our restructuring program is making good progress, with opex (operating expenses) savings ahead of plan and capex (capital expenditures) savings expected to contribute notably in the second half of the year.

"We continue to take important steps for the future and I am confident that we will emerge as a stronger company."

Although net sales were up overall, Embracer noted that sales within its PC/Console Games segment declined by 5 percent year-on-year. Revenue from new releases, however, totalled SEK 1.4 billion–representing one of Embracer's "strongest quarters for new releases ever."

"Remnant II, internally developed by Gunfire Games and published by Gearbox Publishing, was successfully released on July 25 and has now sold more than 2 million units and generated more than SEK 700 million in net sales in Q2," continues the report. "That said, we have seen a mixed reception and performance for the externally developed game Payday 3 and a few smaller releases in the quarter."

Despite its rocky start, Embracer noted Payday 3  made a "positive" earnings contribution "with