Unity says laying off 25 percent of staff was about 'reigniting revenue growth'

Unity's CFO and EVP, Luis Visoso, has confirmed that the company has implemented a 25% workforce reduction as part of a company reset. Visoso stated that these layoffs are necessary to kickstart revenue growth and ensure healthy financials for the company.

image.png

During a recent earnings call, Visoso referred to the mass layoffs as an "unfortunate consequence" of Unity's two-phase reorganization plan. The company is working towards streamlining its operations after facing challenges such as the Runtime Fee controversy and the departure of former CEO John Riccitiello.

Unity is now focused on optimizing its product portfolio, discontinuing certain offerings, reducing headcount, and minimizing office space. Interim CEO Jim Whitehurst emphasized the importance of adopting a "customer-first" business model and maintaining a clear focus moving forward.

Despite facing difficulties, Whitehurst remains optimistic about Unity's future in the gaming industry. He highlighted the company's growth in core subscription business and the promising potential in the industry segment.

Unity will continue exploring "optimization opportunities" in 2024

Unity is nearing completion of the first phase of its company reset and anticipates accelerated revenue growth in the second half of 2024. The company plans to leverage generative AI tools, such as Unity Muse and Unity Sentis, to enhance user productivity and create more engaging experiences.

Whitehurst mentioned that Unity will maintain a cautious approach to managing costs and will explore further optimization opportunities throughout the year. The company aims to continue investing in AI-based workflows within the Engine.

Despite challenges, Unity reported a 35% year-on-year increase in revenue during Q4 FY23. The mutual termination of the service agreement with Weta FX contributed to a significant portion of this growth. The company also saw a decrease in GAAP net loss compared to the previous year.