Unity, the San Francisco-based company that develops video game software, including the popular augmented reality game Pokemon Go, has announced that it is laying off 3.8 per cent of its workforce as part of a “reset” strategy. The company said that it is facing new challenges in the market and needs to align its expenses and revenue.
Unity grew too fast during the pandemic
Unity CEO John Riccitiello said in a blog post that the company experienced a surge in revenue during the Covid-19 pandemic, as more people turned to gaming and digital entertainment. The company grew its headcount and related expenses to pursue growth more aggressively, expanding its game teams, its AR platform work, new game projects and roles that support its products and employees.
However, Riccitiello said that the revenue growth was not sustainable and that the company had to adjust to a new reality. “Our revenue returned to pre-Covid levels and new projects in games and platform have not delivered revenues commensurate with those investments,” he wrote. “We are now facing an AR market that is developing more slowly than anticipated, because of technology challenges and because larger players are slowing down their investments in light of the macro environment.”
Unity will focus on its core assets and long-term vision
Riccitiello said that the company decided to stop production on some projects and reduce its workforce by about 3.8 per cent, which translates to about 150 employees. He said that the company will focus on its core assets and long-term vision, which include:
- Keeping Pokemon Go healthy and growing as a “forever game”
- Launching new experiences based on its IP, such as Harry Potter: Wizards Unite and Jurassic World Alive
- Developing its Lightship platform, a toolset for building AR experiences
- Investing in emerging technologies, such as AI, blockchain and cloud gaming
- Supporting its developer community and partners
Riccitiello said that the company is grateful for the contributions of those leaving Unity and that it is supporting them through this difficult transition. He also said that the company will adopt a more direct and results-based culture, where employees are empowered to make decisions and take ownership of their work.
Unity is not the only tech company facing layoffs
Unity is not the only tech company that has announced layoffs in recent months, as the tech industry faces new challenges and uncertainties in the post-pandemic world. According to data tracked by Layoffs.fyi, some 211,630 people in the tech industry have been laid off this year alone, already surpassing the 164,709 figure recorded in full-year 2022.
Some of the notable tech companies that have cut jobs this year include:
- Niantic, the creator of Pokemon Go, which laid off 230 employees and cancelled several game titles, including Transformers: Heavy Metal
- Airbnb, which laid off 1,900 employees, or 25 per cent of its workforce, as the travel industry was hit hard by the pandemic
- Uber, which laid off 6,700 employees, or 25 per cent of its workforce, as the demand for ride-hailing services plummeted
- IBM, which laid off thousands of employees across its global operations, as part of its restructuring and shift to cloud computing
- Intel, which laid off hundreds of employees in its data center group, as it faced competition from rivals like AMD and Nvidia
Unity is still a leader in the gaming industry
Despite the layoffs and the challenges, Unity is still a leader in the gaming industry, with a market value of over $40 billion. The company went public in September 2020, raising $1.3 billion in its initial public offering. The company reported revenue of $772 million in 2020, up 43 per cent from 2019, and a net loss of $274 million, down 28 per cent from 2019.
Unity is best known for its game engine, which powers some of the most popular games in the world, such as Call of Duty, Assassin’s Creed, and Fortnite. The company also provides tools and services for game developers, such as analytics, monetization, and multiplayer networking. The company claims that over half of the top 1,000 games in the Apple App Store and Google Play Store are made with Unity.
Unity is also a pioneer in the field of AR, which blends digital elements with the real world. The company’s AR Foundation framework allows developers to create AR apps for multiple platforms, such as iOS, Android, and Windows. The company also launched its Lightship platform, which aims to make AR more accessible and scalable for developers and users.
