© Reuters. Embracer Signals Further Layoffs: 1,387 Job Cuts Only The Beginning
Benzinga – by Franca Quarneti, Benzinga Staff Writer.
Embracer Group AB (OTC: THQQF) has undergone a significant restructuring.
What Happened: The Swedish video game and media holding company reduced 8% of the global workforce — the equivalent of 1,387 employees since June.
This reduction accounts for 904 job cuts in the second quarter and an additional 483 in the third. The company also scrapped 29 unannounced games during this period, IGN reported.
“In a group-wide effort, our companies and studios have had to make difficult decisions, particularly on having to part ways with team members,” CEO Lars Wingefors stated.
He added, “The reductions are managed locally on the operative group level with a focus on informing affected employees first, and then carried out with compassion, respect and integrity towards those affected.”
Embracer is also in the process of selling parts of its business, possibly including Gearbox, which it acquired in 2021.
Wingefors said that “processes are in mature stages,” and cautioned that layoffs at Embracer’s studios may occur before any sale is completed.
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.” Financially, 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.
Embracer’s financial challenges stem from the collapse of a $2 billion deal and criticism for past cuts, such as the closure of Volition, 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.
Read Next: ‘Don’t Kid Yourself’: Former PlayStation CEO Sounds Alarm On Video Game Industry
Image credits: Sergei Elagin on Shutterstock.
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