Embracer will undergo a severe restructuring program, affecting the entire company, as well as a few dozen game studios and game projects.
In an open letter to Embracer employees and the public, Embracer CEO Lars Wingefors explained the situation this way:
“It is painful to see talented team members leave. Our people are what make up the very fabric of Embracer. I understand and respect that many of you will be worried about your own position and I don’t have all the answers to all questions. I want to be clear that the decisions about this program were not taken lightly.”
The restructuring will be an ongoing process until March 2024. Embracer currently employs 17,000 but Lars cannot give an exact number on what is the expected head count after restructuring.
As Lars pointed out, Embracer was built on the idea of acquiring studios and IP to make it “one of the largest pipelines of games across the industry.” The changes they will make will shift the company from the investment mode they have been working at thus far, towards more cash flow.
To put it simply;
- An undetermined number of employees will be laid off, some to be moved to different departments where possible
- There will be consolidation for different studios and departments throughout the company
- Embracer will generally look for ways to start making more money more aggressively
Lars made it a point to emphasize that all the games that the company has already announced are still planned for release, but unannounced games are likely to be cancelled. He also name drops a few of these announced games:
- Remnant 2
- Warhammer 40,000 Space Marine 2
- Payday 3
- Hot Wheels Unleashed 2: Turbocharged
- Arizona Sunshine 2
- Alone in the Dark
- Homeworld 3
In the past few years, Embracer’s strategy of acquiring studios and IP very rapidly transformed the company into one of the giants of the industry, standing shoulder to shoulder with the likes of Activision Blizzard and Electronic Arts. While Embracer doesn’t have as many giant franchises as these other companies, the sum total of their acquisitions was enough to raise their stock, figuratively and literally.
There were some recent public issues that raised concerns about the company, but to be clear, nobody outside the company had a definite idea that this was coming.
We had reported from Embracer investor calls on the Saints Row reboot performing below expectations, and Lars being evasive on the question of the Star Wars Knights of the Old Republic Remake.
It seems likely that the cancellation or delay of the latter game has led to Embracer’s current dilemma, but again, we don’t really know the complete picture.
We wish the employees of Embracer well and hope to see the company bounce back in the future.
