Unity Software lays off 1,800 employees

Unity Software has announced it is cutting 1,800 jobs, about 25% of its workforce, marking another wave of layoffs at the gaming technology company. The announcement caused a nearly 5% upturn in the stock in extended trading.

In a regulatory filing, Unity stated that these cuts form part of a broader corporate restructuring plan. Last November, the company had informed investors about a “comprehensive assessment” of its product portfolio and a financial evaluation that could potentially lead to the discontinuation of certain product offerings, workforce reduction, and a smaller office footprint.

Unity anticipates that the majority of the costs and charges associated with this job reduction will be largely incurred in the first quarter of 2024, however, it said it couldn’t estimate these costs and charges reliably.

The past year has been challenging for Unity. In May, 600 employees, representing about 8% of its workforce, were laid off. The company said this move aimed to facilitate “long-term and profitable growth.”

In September, Unity revealed a pricing alteration, upsetting many game developers who use the company’s technology. This led to a protest from a group of game developers who claimed the lack of industry consultation and potential jeopardy for both small and large developers.

The subsequent month, Unity’s CEO John Riccitiello retired, stepping down as chairman and leaving the board. James Whitehurst, ex-CEO of Red Hat, was appointed as the interim CEO and Roelof Botha, a partner at Sequoia Capital and the lead independent director of Unity’s Board, was made chairman.

While Unity shares increased by over 40% throughout the year, they lost almost half their value between July and October end. Unity’s third-quarter earnings missed analysts’ projections, and no quarterly guidance was provided.

The company commented on its third-quarter results in a shareholder letter, saying, “Our results in the third quarter were mixed. While revenue came in within guidance, we believe we can do better.”