Embracer says 1,387 jobs and 29 games lost isn’t enough

2023 and 2024 have been ruinous for the game development community, as layoff after layoff has struck every corner of the industry. At the time of this writing, we lost over 10,000 jobs in 2023 and 2024 is rapidly gaining on it. To anyone following the layoffs, one name kept cropping up: Embracer Group. This conglomerate, which had been acquiring studios left, right and sideways only a few months ago, was now one of the key figures behind the overwhelming layoffs.

The Embracer Group has released its interim third-quarter financial report today. Now we have a better understanding of the full scope of the company’s “restructuring” efforts, including the fact that it’s not yet done with the program. Despite having cut 8% of its workforce, or 1,387 jobs, Embracer said it’s still not going to meet its debt reduction goals. It’s also warned that the bloodletting isn’t finished, as Embracer has not yet dug itself out of debt.

CEO Lars Wingefors said in the financial report, “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.”

Embracer’s restructuring comes on the heels of a reportedly failed $2 billion deal with Savvy Gaming Group. It first announced the restructure plan in June 2023. At the time, Wingefors said, “Across the group, we are now initiating multiple actions to strengthen our cash flow generation and leverage our portfolio of IPs to become a stronger company and setting out on a stable future to build even greater games to the benefit of gamers and fans across the globe.”

The people and games affected by Embracer’s restructure

Embracer said of the layoffs in the press release, “In a group-wide effort, our companies and studios have had to make difficult decisions, particularly on having to part ways with team members. In total, we have reduced our global headcount by 8% of the workforce since the start of the program. The reductions are managed locally on the operative group level with a focus on informing affected employees first, and then carried out with compassion, respect and integrity towards those affected.”

These layoffs resulted in the closure of Volition, Campfire Cabal and Free Radical, as well as at least four other studios: Embracer lists 139 internal studios at the end of the first quarter of the fiscal year, and 132 as of the end of this financial quarter. We also know layoffs affected Crystal Dynamics, Eidos Montreal, New World Interactive and many others.

In addition to the layoffs, the financial report also reveals how many game projects Embracer axed as part of the cost-cutting measures. It lists 153 “unannounced game dev projects” at the end of the first quarter, and 124 at the end of this quarter. This means that 29 unannounced games are no longer in development as of the end of this quarter. One of those projects is reported a new Deus Ex game from Eidos, according to a report from Bloomberg.

It’s not as though Embracer’s studios are not putting out games, far from it. In the 2023-24 fiscal year alone, Embracer-owned publishers released Remnant II, Dead Island 2, Payday 3 and Goat Simulator 3, just to name a few. It also has several other games, including South Park: Snow Day and Alone in the Dark planned to launch before the end of this fiscal year. It remains to be seen how many of these games, studios and projects will remain by the time Embracer is finally in a better financial spot.