Embracer Group, one of the biggest video game and entertainment companies out there, has confirmed it canceled 29 unannounced games and laid off nearly 1,400 people in the past six months as part of its previously announced restructuring effort.
During the July-December period, Embracer said the number of gaming projects it had in the works fell from 153 to 124, according to VGC. Total headcount was cut by 8%, or 1,387 jobs. These cuts includes 871 game developers at internal studios, 264 at external studios, and 252 internal staff working on game projects as non-developers.
Embracer’s total number of internal game studios was 132 at the end of December 2023, down from 139. Embracer said it’s now working with 50 outside studios, a reduction from 59.
CEO Lars Wingefors said Embracer’s restructuring plan is nearly complete, but he warned that there are still “a few larger structure divestment processes ongoing.”
“In a group-wide effort, our companies and studios have had to make difficult decisions, particularly on having to part ways with team members. In total, we have reduced our global headcount by 8% of the workforce since the start of the program,” Embracer said.
Wingefors went on to say that, as a publicly traded company, Embracer’s missions is to “always maximize shareholder value in any given situation,” even if it means cancelling games, closing studios, and laying off staff.
Embracer made these drastic cuts in part due to a major deal falling through at the 11th hour, which has subsequently been revealed to be a pact with Saudi Arabia’s Savvy Games. Embracer previously took $1 billion from Saudi Arabia and defended that decision when people criticized Saudi Arabia’s position on human rights.
Some of the most high-profile moves have included the reported cancellation of a Deus Ex game and the closures of Saints Row studio Volition and TimeSplitters developer Free Radical. Embracer has also cut jobs at subsidiaries like Crystal Dynamics, Gearbox, and Beamdog, among others. Embracer, many will recall, went on a massive spending spree prior to this, and it so much so that it became something of a meme.
The video game industry layoffs are not limited to Embracer and its studios, as Microsoft just cut 1,900 positions from its gaming team and League of Legends developer Riot also cut hundreds of positions, representing just a small number of gaming cuts so far in 2024.
Embracer’s video game unit was profitable during the October-December quarter, with earnings growth attributable to better-than-expected results from Lord of the Rings licensing deals. In particular, Embracer called out Magic: The Gathering’s Lord of the Rings set, the video game The Lord of the Rings: Return to Moria, and revenue from the Lord of the Rings movies. Looking ahead, the next Lord of the Rings film, War of the Rohirrim, hits theaters this December.
Embracer acquired the Lord of the Rings rights in 2023 for $395 million, which was a fraction of what some industry expects believed they might sell for.
Looking ahead, Embracer said it has a “notable pipeline of sizable new games coming in the next two years,” going on to note that the company has made “strategic investments into accelerated organic growth.”