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Updated January 9th, 2024 at 15:10 IST

Unity Software to cut 25% of workforce in strategic overhaul

These layoffs will span across all departments, geographical locations, and business segments.

Reported by: Business Desk
Unity Game Engine
Unity Game Engine | Image:Unity
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Layoffs in Unity: Unity Software, a leading videogame software vendor, has disclosed plans to reduce its workforce by approximately 25 per cent, equating to around 1,800 jobs, as part of a significant restructuring effort. The San Francisco-based firm revealed this decision in a regulatory filing and an internal memo on Monday. Following the announcement, Unity's shares experienced an uptick of nearly 5 per cent in after-hours trading.

This restructuring represents the most extensive layoff in the company's history, set to conclude by the end of March. Although Unity may not have widespread recognition beyond the gaming sector, its software toolkit supports over 1.1 million game creators monthly, including developers behind popular titles like Pokemon Go, Beat Saber, and Hearthstone.

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According to statements provided to Reuters, the layoffs will span across all departments, geographical locations, and business segments. This move follows a prior announcement by interim CEO Jim Whitehurst in November about a comprehensive ‘company reset.’

In his recent memo to employees, Whitehurst emphasised the organisation's intent to streamline operations, stating, ‘We are... narrowing our focus to strengthen our core business, ensuring long-term profitability.’ While specific structural adjustments remain unspecified, a Unity spokesperson confirmed that further changes are forthcoming. Notably, this marks the fourth workforce reduction initiative since July 2022.

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Backlash on runtime fee

The decision to streamline operations comes amid a period of volatility for Unity. Last September, the company faced backlash for attempting to introduce a new "runtime fee" pricing model, which elicited resistance from developers and resulted in a notable decline in share value. Subsequently, former CEO John Riccitiello stepped down, leading to Whitehurst's appointment and the initiation of the company's reset strategy.

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Founded nearly two decades ago by three Danish engineers, Unity gained prominence for its game engine, simplifying game development and deployment across various platforms, including mobile and virtual reality. Beyond gaming, Unity's technology finds applications in industries such as film and automotive for 3D visualisation and virtual reality experiences. Despite experiencing a decline in stock value since its 2020 IPO peak, Unity's shares have surged by nearly 40 per cent following the recent company reset announcement.

(With Reuters inputs)

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Published January 9th, 2024 at 15:10 IST

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