The wave of layoffs in the gaming industry is far from over and the latest studio to feel the impact is Zen Studios. VGC reported that a source at the Budapest, Hungary-based studio disclosed the development to Videogamelayoffs. The source revealed that at least 32 employees lost their jobs.
Zen Studios which is most popular for making Pinball FX was founded in 2003. At the time the studio was acquired by Embracer in 2020 through its subsidiary Saber Interactive, the studio employed 65 developers. As of 2021, the studio had 71 employees.
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The recent development means that nearly half of the employees of the studio were laid off. Many people got to know about the layoff after Adam Dienes, a community manager at the studio shared the news on X with a gif of a ghostly skeleton spinning on a chair in front of a stacked desk.
“The video game downsizing caught up with me too: on Friday the 13th, I was fired from my current job together with more than 30 other colleagues, so I have to look for a new place,” Dienes wrote. “If anyone knows of any possibilities, please let me know.”
Dienes also updated his LinkedIn profile to show that he was looking for a new role. Embracer Group has not been in good shape after its billion-dollar Saudi deal fell through. Subsequently, the group has been restructuring its operations and portfolios to maintain a healthy debt profile.
Embracer announced the restructuring program back in June. The restructuring is expected to lead to studio closures. According to the group’s CEO Lars Wingefors, the comprehensive program was to “better optimize the use of [Embracer’s] resources”.
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The group planned to take “operational and financial measures to increase cash conversion, improve efficiency and reduce capex,” to reach a financial net debt below around $930 million by the end of the 2023/2024 financial year.
Embracer will not comment on Zen Studios’ layoffs
Embracer Group owns 139 studios and over 900 franchises—and that is definitely a lot. While the employees laid off from Zen Studios are licking their wounds and scouting for new roles, the entire studio will feel grateful that they are not one of those shut down by Embracer Group.
Layoffs have also been reported in Gearbox Publishing, Beamdog, and Crystal Dynamics, all of which are owned by Embracer Group. One of the studios that was hit the hardest was Volition Games, the Saints Row developer. The studio was closed leading to the layoff of dozens of employees.
Embracer is also considering the sale of Gearbox which it acquired for $1.4 billion in 2021. Saber Interactive announced it would pause the development of its multiplayer Evil Dead game. The release of the game on Nintendo Switch was also canceled.
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This year has been one of the toughest for people in game development. Over 6,000 jobs have been lost in the video game industry since the beginning of the year. Eurogamer reached out to Embracer for comments regarding the layoffs at Zen Studios. Here is the report they got.
“On the 13th of June, Embracer announced a comprehensive restructuring program for FY 23/24, running until end of March 2024. The program includes a series of initiatives that will focus on cost savings, capital allocation and operational and financial efficiency measures. Part of those initiatives could be the closing of studios and termination of projects. Each process will be managed locally on operative group level with focus on informing affected employees first, and on group level we will not comment on specific studios. Embracer will update the market on restructuring program progress on a regular basis, in connection with quarterly reports or otherwise as required by applicable legislation. Our next quarterly report will be published on the 16th of November.”
Embracer Group response to Eurogamer’s request for comment
What do you think about the culture of acquiring studios by Embracer Group only to shut them down a few years later? Share your thoughts in the comment box below.
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