Unity Technologies, a leading video game software company, announced that it is laying off 92 employees at its Austin office, as part of a global workforce reduction of 25%. The company said the move is aimed at refocusing on its core business and improving its long-term growth prospects.
The affected employees in Austin work in various roles, including engineering, management, and customer service. They will receive severance packages and outplacement assistance, according to a company spokesperson.
The layoffs were revealed in a WARN notice, a federal requirement for employers to notify local governments of major job cuts, filed with the Texas Workforce Commission.
Why did it happen?
Unity Technologies is best known for its game engine, a software platform that enables developers to create and run games across different devices and platforms. Some of the popular games that use Unity’s technology include Pokémon Go, Among Us, and Angry Birds.
However, the company has also expanded into other areas, such as cloud services, advertising, and visual effects. In 2021, Unity acquired Wētā Digital, a visual effects company founded by filmmaker Peter Jackson, for $1.6 billion. The deal was supposed to give Unity access to Wētā’s tools and talent, and help it compete with rival game engine Unreal, owned by Epic Games.
But the acquisition turned out to be a costly mistake, as Unity struggled to integrate Wētā’s operations and culture, and faced backlash from game developers who accused Unity of neglecting its core product and customers. In November 2023, Unity terminated its agreement with Wētā, and laid off 265 employees who worked in the division.
The latest round of layoffs is part of a “company reset” announced by interim CEO Jim Whitehurst, who took over in October 2023 after former CEO John Riccitiello retired amid a revolt from game developers over a new pricing policy. Whitehurst said in a letter to shareholders that Unity was “doing too much” and not reaching its full potential, and that he aimed to make the company “leaner, more agile, and faster growing”.
How will it affect the industry and the community?
The layoffs at Unity Technologies are a blow to the video game industry and the Austin community, which have both seen rapid growth and innovation in recent years. Austin is home to more than 140 game development studios, employing over 4,000 people, according to the Austin Chamber of Commerce. The city is also a hub for tech talent, attracting companies like Apple, Google, and Tesla.
Unity Technologies has been one of the major players in the Austin game scene, having opened its office in 2011 and expanded it several times since then. The company has also supported local game events and initiatives, such as the Austin Game Conference, the Game Developers Conference, and the Austin Game Jam.
The impact of the layoffs on the local game ecosystem is unclear, but some experts say that it could create opportunities for other game companies and developers to hire the laid-off workers, or for the workers to start their own ventures. Austin has a reputation for being a resilient and collaborative tech community, with a strong entrepreneurial spirit and a supportive network of mentors, investors, and peers.