Embracer has announced a “comprehensive restructuring program” which will result in studio closures, project cancellations and job losses.
The Swedish umbrella company has grown enormously through acquisitions over the past five years, and now owns a swathe of studios such as Tomb Raider developer Crystal Dynamics, Borderlands maker Gearbox, rights to franchises such as The Lord of the Rings, and an array of other publishers such as Plaion, Saber and THQ Nordic.
But while amassing its empire, Embracer is yet to see a big return. Last year’s big bet, its Saints Row reboot, was a critical and commercial failure. More recently, the company suffered a body blow when a major unannounced $2bn deal fell through, prompting its shares to plummet by an eye-watering 40 percent.
Today’s reckoning seeks to make Embracer a “leaner, stronger and a more focused, self-sufficient company”, the company’s boss Lars Wingefors wrote in an open letter published this morning.
The first phase of this plan, which will last until March 2024, targets “cost savings across the group” and will mean Embracer’s 17,000 employee headcount will be cut.
By how much? And on which projects and what studios? “It is too early to give an exact forecast on this,” Wingefors wrote.
However, Tomb Raider studio Crystal Dynamics has said it is safe. In a statement released via Twitter, it said there would be “no impact to our continuing efforts with our partners at The Initiative on Perfect Dark, or our next Tomb Raider title being developed in collaboration with Amazon Games.”
https://t.co/bDRpwKvOmv pic.twitter.com/CotpWajxNW
— Crystal Dynamics (@CrystalDynamics) June 13, 2023
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Employees at other Embracer studios remain unclear what the future holds, however.
“It is painful to see talented team members leave,” Wingefors wrote. “Our people are what make up the very fabric of Embracer. I understand and respect that many of you will be worried about your own position and I don’t have all the answers to all questions. I want to be clear that the decisions about this program were not taken lightly.”