You’d think that a company with studios such as Gearbox, Coffee Stain, Crystal Dynamics, Deep Silver, Middle-earth Enterprises and THQ Nordic under its umbrella, along with so many more, wouldn’t be facing too many financial challenges. I mean, the planned games coming out of the Embracer Group include titles like Warhammer 40K: Space Marine 2, Homeworld 3 and Remnant 2, but, according to an open letter published on the group’s website, they’re doing some “restructuring”.
The company, which has close to 17,000 employees, plans to shift from its “current heavy-investment mode to a highly cash-flow generative business, ” meaning it will be dropping a whole load of axes on quite a few people’s heads.
Some studios will be closed completely, while others will be divested out to gain some cash flow. Unannounced games will be dropped, and although the letter states, “All announced significant releases will still be released as planned.”, the word significant has an undertone that some lesser-known announced titles will be dropped as well.
The restructuring will take on a three-phase approach and will run until March 2024. The first phase, which has already begun, will be focused on cost savings across the entire group. The second phase, which is apparently also underway, “will require further analysis to determine specific actions,” sounds like they don’t really know what that phase is either. The last phase will look at internal consolidation, resource utilisation and better synergies across studios in the Embracer Group.
We don’t have an indication of how many people the group will be cutting, but they do say that the number of employees will be less than it is now.
It’s not great to read news about people losing their jobs, especially when it’s in your own industry, let’s hope that it’s not too much of a hurtful punch to the gut for the smaller games studios.