Recently, news broke that Unity announced that it would lay off a large number of its employees in March 2024, a number that left people in the world “psychologically traumatized”.
Unity Software, one of the leading companies in the field of producing game programming support tools, shocked the gaming industry when it announced that it would lay off nearly 1,800 employees in March this year. This is said to be due to the company’s business failure after changing its fee collection policy. In this article, we will learn about the causes and consequences of this decision, as well as Unity’s next steps.
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The reason for the layoff of nearly 1800 employees
According to Reuters, information about the dismissal of nearly 1,800 Unity employees was revealed in the company’s internal documents and notes. Although there are no specific numbers, based on disclosed information, about 25% of Unity’s current employees will be laid off by the end of March this year. This is considered a major business failure for the company, as Unity previously changed the way it collects fees from game studios. Instead of renting their game programming tools, the company will charge more based on the number of installs from users ($0.2/install).
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However, this decision has caused a lot of controversy and opposition from customers. Many people believe that this is an unfair way to collect fees and negatively impacts small studios. This has caused customer confidence in Unity to decline, leading to a continuous decline in the company’s stock price.
Unity’s new fee policy
After receiving many negative feedback from customers, Unity apologized and adjusted its fee policy. However, this may be too late when customer trust has been seriously affected. In addition, Executive Director John Riccitiello also resigned and retired after this decision.
Many believe that the main reason for the layoffs of nearly 1,800 employees was Unity’s previous fee policy. This caused the company to face opposition and loss of trust from customers, leading to business failure and being forced to cut staff to balance finances.
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Unity’s next step
In an internal memo from James M. Whitehurst (current Chief Operating Officer), he noted that staff reductions were necessary to focus on the company’s core businesses. According to the plan, Unity will focus on developing new technologies and improving current products to meet customer needs.
Besides, the company will also focus on expanding the market and looking for new cooperation opportunities to ensure sustainable development in the future.
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In a complicated economic context, the layoff of nearly 1,800 Unity employees is a big shock to the company and the gaming industry in general. However, this is not the first time Unity has laid off employees in large numbers. In early May 2023, Unity laid off nearly 600 employees and only had about 7,000 employees left at that time.
