Unity Software, the leading platform for creating and operating real-time 3D content, has announced that it will be laying off 265 employees, or 3.8% of its global workforce, as part of a larger “company reset” that aims to improve its long-term growth and profitability.
The company reset also involves the termination of the professional services component of an agreement that Unity had signed with Weta FX, the visual effects company founded by Lord of the Rings director Peter Jackson. This agreement, which was made in 2021, involved Unity acquiring the technology and engineering division of Weta FX, which had developed a cloud-based platform for creating photorealistic digital humans and creatures.
Unity Software’s CEO John Riccitiello said in a statement that the decision to cut jobs and end the deal with Weta FX was not easy, but necessary for the company’s future success.
As part of Tuesday’s announcement, Unity will end the professional services aspect of its agreement with Weta FX, a visual effects company linked to movie director Peter Jackson. This termination will affect 265 employees connected to the agreement, resulting in their layoffs.
With a workforce of approximately 7,000 employees, Unity plans to close offices in 14 locations, including Berlin and Singapore, and significantly reduce its office spaces in other areas like San Francisco and Bellevue, Washington. The company also intends to revise its office attendance policy, no longer mandating a three-day office presence and reducing full in-office services to three days a week across most locations.
The company attributed its disappointing financial performance to several factors, including the impact of the COVID-19 pandemic on its customers, the increased competition in the gaming industry, and the regulatory uncertainties in China, which is one of its largest markets. The company also said that it had made some strategic mistakes, such as overinvesting in some areas and underinvesting in others, and failing to align its resources with its priorities.
The layoffs at Unity Software are not an isolated incident. The company had previously announced job cuts earlier this year, affecting almost 300 employees. These layoffs were also attributed to economic factors, as well as the need to streamline its organizational structure and optimize its efficiency. It’s worth noting that this is the second batch of layoffs announced by the company in six months.
Unity Software’s decision to cut jobs and end its agreement with Weta FX is a significant development in the tech industry, as it highlights the challenges that tech companies are facing in the current economic climate, and the tough decisions they have to make to ensure their survival and growth. Unity Software is not the only tech company that has resorted to layoffs and restructuring in recent times. Other notable examples include Activision Blizzard, which laid off around 800 employees in 2022, and Electronic Arts, which cut 350 jobs in 2021.
As the tech industry continues to navigate through economic uncertainties, it will be interesting to see how other companies respond to similar challenges, and whether they will be able to adapt and thrive in the changing market conditions. Unity Software’s announcement of job cuts and the termination of its agreement with Weta FX is a clear indication of the company’s commitment to its long-term strategy, despite the immediate impact on its workforce. The company believes that these decisions are necessary for its future success, and that it will emerge stronger and more focused from this company reset.
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