Embracer Group AB THQQF has undergone a significant restructuring.
Embracer’s Workforce Reduction: The Swedish video game and media holding company recently announced a workforce reduction, amounting to 1,387 job cuts since June. This reduction accounts for 904 job cuts in the second quarter and an additional 483 in the third quarter. Additionally, the company has also scrapped 29 unannounced games during this period, as reported by IGN.
In a statement addressing the layoffs, CEO Lars Wingefors acknowledged the difficult decisions, stating, “Our companies and studios have had to make difficult decisions, particularly on having to part ways with team members.”
Wingefors 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.”
These layoffs come in the wake of Embracer’s decision to sell parts of its business, possibly including Gearbox, a company acquired in 2021. According to Wingefors, “processes are in mature stages,” and he cautioned that layoffs at Embracer’s studios may occur before any sale is completed.
He further added, “Certain companies might initiate restructuring before any divestment is announced.” However, Wingefors controversially emphasized the prioritization of 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 previous 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 also 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.
