Studio closures, game cancellations, and layoffs planned at Embracer Group

Embracer Group has announced a large-scale restructuring program that will result in the Swedish company closing studios, canceling game projects, and laying off staff.

Last month, Embracer Group revealed that an undisclosed $2 billion partnership had unexpectedly fallen through. Now, Embracer CEO Lars Wingefors has announced a restructuring program that will "make us a leaner, stronger and a more focused, self-sufficient company."

Embracer Group announces massive restructuring plan

Embracer Group restructure layoffs, cancellations, studio closures

In an open letter to its 17,000 staff, Wingefors said, "During the past years, Embracer invested significantly both in acquisitions and into a strategy of accelerated organic growth. We have acquired some of the world’s leading entertainment IP and we have invested into one of the largest pipelines of games across the industry.

"The program presented today will transform us from our current heavy-investment mode to a highly cash-flow generative business this year. It will enable us to meet the worsening economy and market reality as a strong company, and it will fundamentally change our prioritization of growth with raised capital towards optimization and growth based on our own cashflows."

Wingefors goes on to say that Embracer currently employs close to 17,000 staff, and that number "will be lower by the end of the year," though it is too early to say how many jobs will be cut. "It is painful to see talented team members leave," Wingefors said. "Our people are what make up the very fabric of Embracer. I understand and respect that many of you will be worried about your own position, and I don’t have all the answers to all questions. I want to be clear that the decisions about this program were not taken lightly." Embracer will try to provide opportunities for staff to move on to other projects where possible.

Over the years, Embracer Group has acquired swathes of studios and video game companies, such as Crystal Dynamics, Eidos Montreal, Gearbox Entertainment, THQ Nordic, Plaion, Saber Interactive, Middle-earth Enterprises, Asmodee, Deep Silver, and many more.

As part of Embracer's restructuring plan, the company will be looking to offload some of the companies it owns. Explaining the plan in further detail, Wingefors says, "Actions will include, but not be limited to, closing or divestments of some studios and the termination or pausing of some ongoing game development projects.

"It will also include decreased spending on non-development costs such as overhead and other operating expenses. We will reduce third party publishing and put greater focus on internal IP and increase external funding of large-budget games." Wingefors notes that mainly unannounced projects will be canceled, and that "all announced significant releases will still be released as planned."

Addressing the restructuring, Crystal Dynamics said on Twitter, "We want to reassure fans that there will be no impact to our continuing efforts with our partners at The Initiative on Perfect Dark, or our next Tomb Raider title being developed in collaboration with Amazon Games."

"As difficult as some of the decisions we will take over the coming weeks and months will be, we are doing this because we are confident that we will emerge a stronger, more efficient company setting out on a stable future to build even greater value across our many studios and fantastic portfolio of IPs," Wingefors said.

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Written by Sean Carey

Avid Xbox and achievement fan, Sean has committed to playing the best RPGs, racing games, and first-person shooters Xbox Game Pass and his precious free time will allow. Prior to joining TrueAchievements, Sean gained a degree in journalism from Solent University.