Embracer’s headcount has plummeted by 4,532 employees over the past financial year, while 44 studios have been closed and 80 in-development projects have been dropped during this period.
This news comes as part of Embracer’s latest quarterly financial report, in which CEO Lars Wingefors states the company’s restructuring program is now “successfully completed” and has “created a stronger foundation for improved profitability, cash flows and long-term value creation.”
The restructuring program began in June last year following the Swedish umbrella company’s acquisition of a number of studios, many of which have now been divested and staff laid off. A key reason for this was the collapse of a proposed $2bn partnership with Saudi Arabia’s Savvy Games.
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The drop of 4,532 employees represents a 27 percent reduction in the company’s workforce.
Wingefors described this past financial year as “a transformative year for Embracer.” He continued: “Throughout the last year, our companies and studios have had to part ways with team members. These were necessary but difficult decisions, and it has been important to carry out the changes with compassion, respect and integrity towards those affected. Post -restructuring, we will strive to make continuous improvements as part of our ordinary business, to further improve operational efficiency and capital allocation.”
As previously reported, Embracer will now split into three distinct entities: Asmodee Group, Coffee Stain and Friends, and Middle-earth Enterprises and Friends. Each will, in Wingefors’ words, “boast sufficient scale, coherent strategies and a clearer focus, paving the way to unlock value in our high-quality assets.”
The last financial quarter saw a drop of 10 percent in sales, owing to both the loss of studios and the “softer-than-expected performance” of Alone in the Dark and Outcast: A New Beginning. The Tomb Raider remastered collection has “performed above management expectations”, while Star Wars: Battlefront Classic Collection was “in line with management expectations” despite negative reviews.
Looking ahead, the likes of Kingdom Come: Deliverance 2, Killing Floor 3, Disney Epic Mickey: Rebrushed, Hyperlight Breaker, Gothic Remake and Titan Quest 2 are the most important releases for the next financial year, along with “at least three other important , unannounced releases”.
In total, the company expects to release “more than 70 game projects” during the financial year, although it’s unclear exactly how this is calculated.
“We are now starting a new and exciting chapter for the businesses and people that make up Embracer Group. I am excited about the future and fully convinced that the best is still ahead of us,” concluded Wingefors.
Embracer has been widely criticized for its acquisition strategy and the resulting layoffs, although Wingefors was defended by Saber Interactive CEO Matthew Karch following its “bittersweet” split from Embracer.
Layoffs across the industry this year have now exceeded 10,000. Why is this happening? Check out our feature on what is going on with layouts in the video game industry.
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