Embracer has publicly disclosed they have laid off 8 % of their staff.
As shared by Stephen Totilo, they fired 1,383 from their 16,601 employees, the headcount as Of March 2023. As of December 2023, they disclosed a headcount of 15,218. If that percentage seemed somewhat low to you, these numbers should give you an idea of how incredibly bloated Embracer Group has become from their investments into as many independent studios as they could get their hands on.
Embracer explained that they still have more restructuring plans, and also that these plans are unlikely to get them to reach their financial goals. Quoting their press release:
“As part of the restructuring program, Embracer still has a few larger structured divestment processes ongoing that could strengthen our balance sheet and further reduce capex. Processes are in mature stages. Certain companies might initiate restructuring before any divestment is announced.
Our overruling principle is to always maximize shareholder value in any given situation. We are unlikely to reach the restructuring program target of below SEK 8 billion in net debt by March 31. Certain divestments could significantly reduce net debt post March 31, 2024.”
Embracer Group CEO Lars Wingerfors also shared further comment on their ongoing restructuring plans in the Q&A of their latest financial meeting. As reported by TechRaptor, Lars said this:
“There are a lot of underlying changes to the industry, that obviously affect all of us in the industry. I think looking at the 8% reduction in the workforce… I don’t know the numbers for the whole industry, but I think it’s something that everything needs to go through.
It’s driven by overinvestment in previous years because everyone put all capital into gaming and perhaps a bit too much capital in a few instances.”
Their report hasn’t exactly satisfied Embracer’s investors. As revealed by Dr. Serkan Toto, their stock is currently down 13.4 percent in their native Sweden.
It must be said that Lars has a point, that Embracer is not the only video game company that stretched themselves too thin with investments, and that is the reason much of the industry is currently doing the same restructuring and layoffs.
Of course, that does not in any way justify or excuse Lars and the other executive management at Embracer, who did not have to enter the acquisition spree that they did that placed them in the position that they were today. It’s quite clear that many studios that were acquired by the company, like the now defunct Volition, would have been better off if they didn’t sign off of that deal in the first place.
Looking at the bigger picture, it is certainly also true that the video game industry goes through these cycles of boom and bust periods, where studios grow and then shrink or even close, matching industry and market trends. Things certainly look bad now, and no one should have to lose their job under these circumstances, but the industry will definitely bounce back at some time in the future.
We continue to offer our empathies to the people in the industry who have lost their jobs in the past year, and we hope they can find placement back in video games, if not now, at some point in that hopeful future.
