Embracer Group cut 904 jobs in restructuring program so far

Latest earnings report contains details on cost-cutting program

Swedish gaming giant Embracer Group has released its financial report for Q2 of FY2024, which revealed that “as of September 30, 2023, the restructuring program contributed to Embracer’s first ever quarter-over-quarter reduction in headcount of around 900 people, or 5% of the workforce.” The exact figure of 904 people is given later in the report.

“In this group-wide effort,” the section continues, “we are not only discontinuing a number of studios, we have also made staff reductions and reduced the number of projects in several other studios, with a focus on return on investment within PC/Console.”

Embracer Group is carrying out a large-scale restructuring program / Embracer Group

Among the completely closed studios under Embracer’s umbrella are Volition, Campfire Cabal, and, reportedly, Free Radical Design. Though a tragedy for the affected employees, the group’s cuts seem to be showing some effects already with free cash flow having improved. Embracer expects that the main effects of the program are “still mainly ahead of us.”

That doesn’t mean the restructuring program is at an end just yet: “Continued execution of the restructuring program will be key to improve efficiency, profitability and cash flows within the PC/Console Games segment.”

The report contains “a special thanks to the people who have left Embracer in the quarter” and emphasizes the importance of the program being carried out “with compassion, respect, and integrity.”

Embracer judges Q2 to have been “a stable quarter” with gaming revenue being down, but sales overall having increased due to strong growth in the tabletop gaming and entertainment sections.

PayDay 3 is performing below management expectations due to struggling right at launch, but seems to have recouped development costs.

Just like in the previous report to this one, Remnant 2 and Dead Island 2 are being praised for their contributions. Going forward, Embracer Group confirmed the following releases for the rest of the ongoing financial year, which ends on March 31, 2024:

• Homeworld 3
• South Park: Snow Day!
• Arizona Sunshine 2
• Expeditions: A MudRunner Game
• Alone in the Dark
• Outcast – A New Beginning
• Lightyear Frontier
• Deep Rock Galactic: Survivors

Embracer did not provide the same confirmation for Saber Interactive’s Warhammer 40,000: Space Marine 2, stating that external publisher Focus Entertainment would communicate the release date for it.

The costly Lord of the Rings license finally seems to bring in returns as well, with Embracer noticing that a licensing agreement with Wizards of the Coast has had some strong results.

Overall, Embracer Group has a positive outlook on the gaming market, stating that the PC segment is currently the one expected to grow the fastest, followed by console gaming. In a reverse of what has been the trend for years, the mobile gaming segment is expected to decline a bit.

Lord of the Rings open-world MMO in development at Amazon Games