Unity is Laying Off Hundreds of Its Staff — But Why?

Unity Technologies laid off hundreds of employees at its offices in different parts of the world.

What Is Unity Technologies?

You've probably seen the Unity logo appear in the loading screens for some of your games. Founded in the 2000s, Unity is utilized by thousands of developers. According to the company's IPO filing with the Securities and Exchange Commission, 3,300 individuals worked there as of June 2020, although estimates on its LinkedIn and Glassdoor pages that the number was closer to 5,000, according to the report of Kotaku.

Unity Laid Off Staff

Venture Beat mentioned that Unity acknowledged it had recessions. According to the reports, there were some (unreported) layoffs at least one month ago. On Tuesday, a new round of layoffs started, and they continued this week.

Sources told Kotaku that the company's retrenchment has affected almost every department, with the AI and engineering divisions showing the most impact. Employees of Unity said on Blind, an anonymous message board frequently used by workers in the tech sector,

that approximately 300 to 400 people have been let go and that layoffs are still happening.

Challenges of Unity

Venture Beat said that the fact that Unity, unlike its rival Epic Games, does not produce video games itself while having a large staff of engineers working on its game engine, is one of the company's challenges.

For the Unity game engine, the company has much more users than Epic Games does, but Unity depends on money from Unity Ads, which is highly reliant on mobile. Additionally, Apple's recent focus on privacy, where privacy is prioritized over targeted advertising, has harmed the capacity to target users with user acquisition campaigns.

Why Did Unity Retrenched Employees?

Kotaku reported that according to a statement from the company, some resources have been realigned in order to improve focus and support long-term growth. This led to some difficult decisions that affected about 4% of the whole Unity workforce.

"We are grateful for the contributions of those leaving Unity and we are supporting them through this difficult transition," the company spokesperson said.

Unity's Support Towards the Affected Staff

For individuals who have been laid off for a month, Kotaku noted that Unity will continue to pay them. After that, they will provide them with another month of severance pay and COBRA health insurance. Employees that are impacted are also eligible to apply for other open positions at the company. It's important to note, though, that the business apparently implemented a hiring freeze in all divisions.

Employees in Denmark, Canada, and the U.S. have so far been impacted by the layoffs.

According to witnesses who were there, CEO of John Riccitiello informed staff members during a two weeks ago all-hands in front of about 3,000 full-time Unity employees that the company was not in financial problems and that Unity will not be laying off any employees, said to Kotaku.