Unity warns of likely layoffs following runtime fee decision

This year has seen a slew of studios and gaming companies face significant layoffs, and it doesn’t seem like things are set to slow down soon. It appears Unity may be the next to suffer layoffs as it attempts to become a “leaner, more agile, and faster growing company.”

In a shareholder letter, Unity CEO James Whitehurst claims that the company has a big opportunity to grow in the future, though that may be difficult at present because the team is trying to do too much at once. As Whitehurst explains, “we are not achieving the synergies that exist across our portfolio, and we are not executing to our full potential.”

Third-quarter financial results are described as “mixed.” The strategy to make the company leaner will include increasing focus on its main projects such as the Unity Editor. Though nothing is set in stone yet, the plan will likely involve discontinuing certain products, reducing the business’s office footprint, and reducing the size of the workforce.

The letter also addressed the controversy surrounding the announcement of runtime fees. Whitehurst acknowledges that “the execution created friction with our customers and near-term headwinds.” Despite this, there’s no indication of any intentions to back down. The event is described as “now mostly behind us,” though it is expected that because of the controversy, the new business model will be minimally beneficial in 2024 until customers adopt Unity’s new releases.

No date is given regarding when these interventions will be implemented but further guidance will come with the fourth quarter and full year 2023 results.