Embracer Group AB THQQF has undergone a significant restructuring.
Workforce Reduction: The Swedish video game and media holding company has implemented a workforce reduction, resulting in the termination of 1,387 employees since June, which accounts for 8% of the global workforce.
The company made 904 job cuts in the second quarter and an additional 483 in the third. In addition to the layoffs, Embracer also decided to cancel 29 unannounced games, as reported by IGN.
CEO Lars Wingefors mentioned, “In a group-wide effort, our companies and studios have had to make difficult decisions, particularly on having to part ways with team members.” He emphasized that the reductions are managed locally and are executed with compassion, respect, and integrity towards those affected.
Embracer is also in the process of streamlining its business by possibly selling parts of its business, including Gearbox, which it acquired in 2021. Wingefors cautioned that workforce adjustments at Embracer’s studios may precede the completion of any sale.
He added, “Certain companies might initiate restructuring before any divestment is announced.” Wingefors controversially prioritized shareholder value, stating, “Our overruling principle is to always maximize shareholder value in any given situation.” Embracer may not meet its target of reducing net debt by the end of the fiscal year, but anticipates significant reductions post-March 2024 through divestments.
The company’s financial challenges are attributed to the collapse of a $2 billion deal and scrutiny for past cuts, such as the shutdown of Volition, the creator of Saints Row. Notable acquisitions in Embracer’s history include Darksiders, Red Faction, and the BioMutant IP. Recent developments include the cancellation of a new Deus Ex game and layoffs at various studios, including Eidos Montreal and Black Forest Games. Despite underperforming titles, recent releases like Deep Rock Galactic: Survivor and Tomb Raider 1-3 Remastered have shown promising sales.
Image credits: Sergei Elagin on Shutterstock.
