Unity cuts 265 jobs and closes 14 offices – and more is to come

Company terminates an agreement with Peter Jackson’s Weta FX

Game engine developer Unity has announced a round of job cuts at the company, which are not directly related to its gaming business, but will see 265 employees lose their positions – almost 4% of its global workforce, as Reuters reported. These layoffs are all related to the termination of an agreement between Unity and film director Peter Jackson’s virtual effects company Weta FX.

Unity purchased the technology and engineering arm of the company, called Weta Digital to keep it apart from Weta FX, in 2021 for $1.63 billion USD, while Weta FX remained under the majority ownership of the Lord of the Rings director, though both entities continued to work together under the now-terminated agreement. This is just one of many acquisitions undertaken by Unity between 2020 and 2022, which among others include the desktop streaming service Parsec, VFX company Ziva Dynamics, and monetization technology developer ironSource.

Unity announced a round of layoffs after indicating such a move earlier this month / Unity

In addition, offices in 14 locations will be closed down to save costs. This, at least, has the boon of employees getting more home office opportunities in some places, as Unity will drop its rule of mandating workers to come into the office at least three days a week.

Interim CEO of Unity Jim Whitehurst, who’s leading the company for the time being after former CEO John Riccitiello retired, stated towards Reuters that this was not the end of the company’s efforts to slim down: “While no additions have been finalized, it's clear that we will reduce the number of things we are doing overall.”

The company announced that layoffs would be coming up earlier this month in the context of its latest financial report.

Earlier this year, Unity tried to implement a new pricing scheme for its game engine, which led to developers protesting and leaving the engine. Unity eventually backtracked, implementing a new pricing policy that’s slightly less disastrous. Ultimately, the entire affair led to developers’ trust in the company being broken, which will have negative effects on the business in the long term.