Unity Software to lay off 1,800 employees, or 25% of its workforce

Unity Software, a San Francisco-based video game software provider, is undergoing its largest layoff ever, cutting around 25% of its workforce, equivalent to 1,800 jobs, the company said in a regulatory filing and an internal memo circulated on Monday.

The layoff announcement follows the surprise departure of CEO John Riccitiello three months ago, with James M. Whitehurst taking on the role of interim CEO. The layoffs are part of a broader “company reset” initiated by Whitehurst in November, with the restructuring expected to be completed by the end of March.

In the memo to all Unity employees on Monday, Whitehurst wrote: “We are … reducing the number of things we are doing in order to focus on our core business and drive our long-term success and profitability.”

Unity, although not widely known outside the gaming industry, is a crucial player, serving over 1.1 million game creators each month, including those behind popular games like “Pokemon Go,” “Beat Saber,” and “Hearthstone.”

In response to the job cuts, a company spokesperson confirmed that the layoffs would impact all teams, regions, and aspects of the business. Whitehurst emphasized in a memo to employees that the restructuring aims to streamline operations and refocus on the core business for long-term success and profitability.

In a statement, the company told Reuters that Monday’s deep job cuts will affect all teams, regions, and areas of the business.

While specific details about structural changes were not provided, it’s noted that this marks the fourth round of layoffs for Unity since July 2022. The company has faced challenges, including a controversial attempt to implement a new “runtime fee” pricing policy in September, which led to a significant backlash from developers and a subsequent revision of the fees. Riccitiello’s retirement followed, and Whitehurst, along with Roelof Botha as board chairman, took on leadership roles.

As part of the ongoing reset, Unity terminated an agreement with a visual effects company in November and made changes to its working arrangements, allowing employees to no longer be mandated to work from offices. Monday’s layoffs represent the second phase of this company reset.

Unity initially gained popularity for its game engine simplifying game development across various platforms. In addition to gaming, Unity’s technology is utilized in industries such as film and automotive for 3D visualization and virtual reality. Despite reaching a peak stock value of around $200 after its 2020 IPO, Unity’s stock experienced a decline, falling below $30 in the past year.

Unity was founded in Denmark in 2004 by David Helgason, Joachim Ante, and Nicholas Francis as Over the Edge Entertainment. The company later changed its name to Unity Technologies in 2007. Unity is the creator of the world’s leading real-time 3D development platform, giving users the most powerful and accessible tools to create, operate, and monetize experiences in the real-time world.