Swedish mega-publisher Embracer Group has laid off more than 900 people as it looks to mitigate its massive $1.3 billion in debt. With these cuts — and more to come — Embracer expects to lower that number to below $1 million by the fiscal year’s end. The company, which is known for its rapid expansion and industry consolidation, has 15,701 employees as of late September, according to its latest financial report.
Embracer expected to sign a $2 billion deal with Saudi Arabia-government funded Savvy Games Group. The deal fell through, and forced Embracer to quickly cut its costs due to its aggressive overexpansion and spendy IP acquisition. Embracer expects to continue to reduce its headcount via “on-going restructuring, closures or buyouts.” Massive cuts have already been made at TimeSplitters developer Free Radical Design, Star Trek Online’s Cryptic Studios, Tomb Raider developer Crystal Dynamics, and Mythforce studio BeamDog, as well as full studio closures at Saints Row developer Volition — which just celebrated its 30th anniversary — and newly established Campfire Cabal, among others. Borderlands developer Gearbox Entertainment is just one of Embracer’s studios that’s reportedly up for sale.
“These are difficult decisions and we do not take them lightly,” CEO Lars Wingefors wrote, shortly before pointing out Embracer is “focused on maximizing shareholder value.” He continued: “For me, personally, it is crucial that the program is carried out with compassion, respect, and integrity.”
Alongside the job cuts, Embracer has also shut down development on 15 “main unannounced projects” from Amplifier, Freemode, Gearbox, PLAION, Saber, and THQ Nordic. Perhaps because of these cuts, Embracer reported a 13% increase in its net sales year-over-year for its second quarter alongside all of the bad news.
Embracer’s confirmation of its hundreds of job losses comes in a week where each day has brought the announcement of another layoff: Amazon Games, 505 Games’ owner Digital Bros. Entertainment, Kongregate, and Humble Bundle have all laid off workers this week. More than 7,000 people, per an industry tracker, have been laid off so far in 2023.