Why is Unity considering more layoffs?

Unity, the renowned game engine maker, seems to be bracing for another round of layoffs, as revealed in its recent quarterly financial report. Despite experiencing a significant 69% year-over-year increase in revenue during the third quarter, the company continues to grapple with financial challenges, hinting at the possibility of further workforce reductions.

The struggles at Unity have been ongoing for quite some time. In June 2022, the company laid off at least 200 employees, followed by another wave of nearly 300 job cuts in January 2023. The situation escalated in September when Unity introduced a controversial “Runtime Fee,” causing widespread backlash. Subsequently, CEO John Riccitiello, who had already stirred controversy the previous year, stepped down in response to the negative reception.

Unity maintains that the backlash against its pricing adjustments did not significantly impact its financial results for the quarter, and it anticipates potential long-term benefits from the changes. However, the company acknowledges the uncertainty surrounding the ultimate impact of the response on its business.

What specific measures is Unity considering?

Interim CEO James M. Whitehurst expressed dissatisfaction with the company’s current state, stating that Unity is doing too much without achieving synergies and not realizing its full potential. Whitehurst aims to transform Unity into a leaner, more agile, and faster-growing company, with specific plans to be shared in the coming months.

In the context of recent industry layoffs in 2023, the phrase “lean and agile” often translates to corporate restructuring and workforce reductions, a sentiment echoed in Unity’s plans. The company indicated that it would likely discontinue certain offerings, reduce its workforce, and decrease its office footprint as part of its assessment of the product portfolio.

While the exact timeline for these changes remains uncertain, Unity’s statement strongly suggests impending job cuts. Interim CEO Whitehurst, while acknowledging the pain of having fewer people, emphasized the company’s commitment to its mission and values, expressing confidence in inspiring and engaging employees through future success.

Severance Entitlement for Unity’s Employees

In Canada, non-unionized employees and executives at Unity have the right to receive full severance pay in the event of job loss due to downsizing or corporate restructuring. The amount of severance pay is subject to variation and can potentially extend up to 24 months’ worth of pay, depending on various factors. Particularly in the case of extensive layoffs, severance pay may surpass the usual limits. If employees suspect they are not receiving the complete entitlement, seeking legal counsel is advisable to ensure they secure their rightful compensation.

At Whitten & Lublin, we recognize the challenges associated with job loss or termination, and our seasoned employment lawyers are available to assist in navigating legal options. Our goal is to ensure individuals receive the compensation they are entitled to. We encourage anyone affected by recent layoffs in Canada to reach out for a consultation, either online or by phone at (416)-640-2667, to discuss their situation today.