As reported by The Verge:
Embracer Group, the company attempting to forge one video game publisher to rule them all, has just presided over another round of layoffs. Eidos Montreal is letting go of 97 game developers and support staff, the company announced today on X, shortly after Bloomberg’s Jason Schreier scooped that the studio has canceled an unannounced Deus Ex video game.
This is just the latest in a round of increasingly desperate attempts by Embracer to reduce their burn rate to something they can afford. This is deeply misguided, for several reasons.
- Layoffs are expensive. A laid off employee still receives several months of pay in severance, and several months of benefits, which can't just be cut off cold because you decided they would be unemployed now, through no fault of their own.
- Layoffs are destructive. Contrary to the popular beliefs of CEOs, terrified employees don't work harder; they spend work time hunting for better jobs elsewhere, assuming they don't burn out from their suddenly increased stress. Expect turnover and absenteeism to increase, and remain high, even as productivity drops and remains low.
- Layoffs are short-sighted. Embracer Group does not makes games; they employ people who make games. Or at least, they did; every new round of layoffs mean fewer people to make the games which are their sole source of revenue. And good luck hiring new people to replace the ones you laid off -- nobody wants to get hired at a company that's as badly managed as Embracer.
This is a death spiral.