Embracer Group CEO Defends Layoffs Within Company and Industry, Shrugs Off Role In It
If you’ve paid attention to gaming news throughout the first six weeks of 2024, you’ll know that one of the biggest ongoing stories is that there have been TONS of layoffs across the industry within those first six weeks. As we reported in January, there have already been over 5500 jobs lost so far, and in all of 2023, there were 10,000. Given other reports about layoffs, downsizing, restructuring, and so on, it will likely hit over 10K in losses before too long. That brings us to The Embracer Group because they are a company that has helped with those layoff numbers, but their CEO defends what they’ve done.
During their recent earnings call, CEO Lars Wingefors not only defended the layoffs that the company has done since last June, which total over 1400 in number, but said that it’s something the entire industry is going through:
“More or less all companies are [going] through a restructuring program. 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.”
Oh, there’s more. You might recall that one of the reasons that The Embracer Group is so hated within the industry is because they went on a “shopping spree” to pick up various companies. Then, when those companies’ games didn’t do well for one reason or another, they either downsized them or shut them down entirely. That happened last year with Volition, and other layoffs have followed that. During the earnings call, the CEO brushed off those accusations of “contributing to the massive layoffs” by saying it was “fine for them to do it at the time:”
“So it’s kind of, okay, we had that strategy back then. Now, we need to adjust that, because the cost of capital has increased. So it’s just the overinvestment into content that is not supported by the cash flow from the operations or external capital.”
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