After earning $544 million in its most recent quarter, Unity says even more layoffs are ‘likely’

It looks like game engine maker Unity is going to be laying off even more employees. Six months after putting 600 people out of work in the year’s third round of layoffs and announcing plans to close half its offices worldwide, the company said in its most recent quarterly financial report that despite a 69% year-over-year increase in revenue in its third quarter, it’s still bleeding money, and more people will probably have to go.

It hasn’t been going well at Unity for a good while now. In June 2022, Unity laid off at least 200 people, and in January 2023 nearly 300 more were put out of work. Things came to a head in September when the company announced a surprise new “Runtime Fee” that would charge developers on a per-install basis. The blowback was beyond furious, and just a month later longtime CEO John Riccitiello—in case you’d forgotten, the guy who’d enraged the world a year earlier by calling developers who don’t properly consider how to monetize their games “fucking idiots“—stepped down.

Unity said the negative reaction to its pricing did not “materially impact” its financial results for this quarter, and that it still expects “a potential benefit from this change over the long term.” It also acknowledged, however, that “the ultimate impact [of the response] on our business remains uncertain.”

The bigger issue, though, is that interim CEO James M. Whitehurst just doesn’t like the current state of the company. “We are currently doing too much, we are not achieving the synergies that exist across our portfolio, and we are not executing to our full potential,” Whitehurst said in a message to Unity shareholders. “We aim to address these opportunities to emerge as a leaner, more agile, and faster growing company. We will share specifics as plans are finalized over the next few months.”

If you follow business news at all, or even if you just read our reports about the myriad layoffs that have plagued the videogame industry in 2023, you’ll know that “lean and agile” is basically corpo-code for “we’re going to start putting people out of work.” And sure enough, that appears to be the plan.

“In the fourth quarter of 2023, we underwent a CEO change and began a comprehensive assessment of our product portfolio to focus on those offerings that are most valuable to our customers, which are the core aspects of our Create and Grow Solutions,” Unity said. “This assessment will likely lead us to decide to discontinue certain offerings, reduce our workforce and reduce our office footprint.”

Unity said it’s “uncertain” when the job cuts and other changes will happen, and while “likely” means it’s not a sure thing that more layoffs will happen, it sure sounds like it will. 

“While it is painful in the sense that we will have fewer people, I think the people will hear, will be very inspired by the mission,” Whitehurst said in an earnings call. “And what we’re going to do is all around kind of our mission and our values. And you get engaged as you see success and [profitability] and growing. I feel very, very good that, because we come out of this phase, people are going to be both inspired by what we’re doing and proud of the success that we’re able to generate.”

I’ve reached out to Unity for more clarity on that point and will update if I receive a reply.

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