Unity is laying off 25% of its workforce in what it's calling a 'company reset'

After laying off 600 people and closing multiple offices earlier in the year, engine maker Unity warned in November 2023 that further layoffs were likely. In an SEC filing made today, the company confirmed that it is cutting roughly 25% of its current workforce in order to "position itself for long-term and profitable growth."

This is the fourth round of layoffs over the past year, according to a Reuters report, and will be the largest ever at Unity. Approximately 1,800 people will be put out of work by the layoffs, which Unity said will impact "all teams, regions, and areas of the business." A Unity rep told Reuters that further changes to the company are coming, but details were not provided.

Unity was first released in 2005 and has grown to become a tremendously popular game engine. But the last couple of years have not gone well: It laid off 200 people in June 2022 and nearly 300 more in January 2023, and then really blew things up in September of that year when it surprised developers with a new "Runtime Fee" that would impose new charges on developers on a per-install basis. That sparked a tremendous backlash from developers that eventually forced longtime CEO John Riccitiello to resign.

But that ill-considered idea wasn't actually at the root of Unity's current struggles, according to interim CEO James Whitehurst, who said in November 2023, "We are currently doing too much, we are not achieving the synergies that exist across our portfolio, and we are not executing to our full potential." The solution to that problem is to become "a leaner, more agile, and faster growing company," Whitehurst said, which of course means eliminating jobs.

"Today, as part of our company reset outlined in our Shareholder Letter on November 9, 2023, we announced that Unity has made the difficult decision to implement a workforce reduction, targeting approximately 25% of our total workforce across all teams," a Unity spokesperson told PC Gamer. "This decision was not taken lightly, and we extend our deepest gratitude to those affected for their dedication and contributions. We are committed to supporting impacted employees through this challenging transition. We appreciate the understanding and support of our community and stakeholders as we navigate these changes together."

Even though the cuts were expected, the extent of the layoffs—a full quarter of the company's workforce—is shocking. It also continues a pattern of instability that plagued the game industry throughout 2023, a year that saw widespread layoffs and closures at major publishers and small studios alike. But cutting jobs seems to be having the desired effect: Unity's share price has bounced back significantly since Whitehurst announced the company reset, and laid off another 265 employees, in November 2023. So there's that, I guess.