Unity Software to Cut 1,800 Jobs in Wake of Runtime Fee Fiasco

Wow, that pricing debacle has to go down as one of the worst management decisions ever. That’s an unbelievably huge layoff. What a disaster.

1800 people losing their jobs and the shareholders get increased portfolios. Despicable.

Unless there's no debate of choosing between unreal and unity anymore...

@TrannosaurusBex Well, that's how it works for public companies. You fail to make more profit each year, bad news for shareholders - stocks drop, then cut jobs - stocks rise, good news for shareholders. It's a vicious cicle.
Only a privately or state owned company can eat decreasingly low or no profits, to a degree.

@Sil_Am Yeah and not only that but increased profits too.

Losing that many staff will surely have a negative impact. Devs seeing this will be thinking that future enhancements to the software will be impacted and customer support etc. It makes Unity even less appealing.

The only winners are the shareholders who literally couldn’t care for this industry or company and are only in it for money.

I feel bad for the employees but I'll be surprised if Unity is in business at all in 5 years

@Sil_Am unfortunately so. Personally, I view the loss of large numbers of jobs as a catastrophic failure by senior management and a reason not to invest in a company. Clearly I'm doing capitalism wrong and this is why I'm not rich (among other factors)

The board should’ve been a little more thorough when bringing on their CEO. All are not equal and some do have very clear failures with huge red flags 🚩

Probably not a comment post will like to hear; but I pulled Unity’s financial statements and they lost 600 million for the 3 quarters ended 9/30/2023 (which would be based on revenue from before the install fee announcement). These losses increase each year fairly proportionately to their increases in revenue each year which shows the historical business model will not allow profitability based solely on increased sales, the business model needs to change because without profit the Corp would go out of business. The install fee was a way to boost revenue (even though I don’t agree with it either) and since that causes backlash, then the only options they have are to increase the licensing fee itself as a base or cut expenses. As labor is almost always the largest expense for an org, the expense cuts lead to layoffs. Unity can not continue to operate as it did in the past as it was loosing too much money; it’s own returns would not cash flow is operating activities, if investors pull out, Unity Software Inc would go belly up

Did Unity themselves justify the layoffs based on bad decisions, such as the "installation fee policy revision" debacle, or is it Pushsquare's view on the matter? (Which is fair interpretation, naturally!)
I ask that, because the time lapse since that proposal (september 2023) does not go very very far, only abour 4 months, and I wonder if 4 months would be enough time to such a decision impact Unity's financial structure to the point of making it loose 25% of its workforce to "balance things up" financially, which translates to 1800 jobs (!).
I do sometimes wonder if many of these layoffs, specially in large scale corporations, are not related to the advancements of AI and its capacity of replacing real people in a variety of tasks. Unfortunatelly, that translates in a reduction of production costs, and as it is no secret to anybody, corporations are not philanthropic institutions, and will likely not hesitate in replacing its workforce for a software that can perform similar tasks, but does not require a paycheck

@DrDollarMD

Should have read your comment before writting mine! (Although I believe there could be some truth in what I wrote, or at least, if not in the present, for the near future...).
Anyway, very clarifying, thank you.

I bet all the people involved in the bad decisions kept their high paid jobs.

Was reading about the company bet365 they “lost” 60m last year and the CEO paid herself 270m……

She could have just taken 200m and they made 10m profit.

People think business has always worked this way. It hasn’t.

Hope it was worth it for the bigwigs. Bet most of them kept their jobs.

Add the 1800 to the 1300 they’ve laid off since June 2022 and that’s a massive workforce reduction over a span of 19 months.

This article is an interesting but skewed reading of the RTF fiasco that accepts no blame for the cost of the revolt . The RTF was a poorly executed attempt to address an underlying lack of revenue/increased cost for developing the engine. Its an incredibly r&d intensive business and the tech/cloud costs are only going up. The ad business used to pay for that but then apple brought in idfa and applovin bought MoPub. The latter in particular cut access to supply overnight as they prioritised their own network and Uads revenue tanked. There were a couple of own goals here including a massive dose of complacency that mediation would be the future of ad monetization. RTF was a desperate attempt to address the underlying cost base on the engine (ironSource acquisition a similar attempt on the mediation side), developers get increasingly expensive-to-build sophisticated tech for peanuts, its unsustainable. So if people won't pay you have to decrease the cost base. Sadly the big RTF revolt and the ad boycott organised by applovin in response, brought the company to its knees. Given the previous hubris and complacency radical steps needed to be taken and nearly 2000 people are paying.

I'll repeat the same exact comment I wrote in the article about PlayStation's record 123 million active users, as this one precisely represents the other side of the coin:

The industry is in such a weird place right now. As PlayStation breaks record after record, layoffs and studio shutdowns have been happening every other week.

While the projected weaker economy surely plays a part, I think the main issue is far more concerning: gaming as a business is firmly marching towards an unsustainable model. AAA game budgets have simply reached a level where the tolerance to risk in unbearable.

The even more concerning thing is that these issues usually do not resolve by themselves without a hard crash.

To complement the original comment, I don't think Unity's fall from grace is simply because of the fee fiasco. We need to take a step back and understand that the whole mess happened exactly because of the state the industry is in right now. That is, Unity felt the pressure to do something to improve its results. And the fact that the best solution they came up with was that atrocious commercial model is the unequivocal proof of my whole point.

I bet management had that amazing run time idea.
Employees said "NO that's a bad idea"
Amazing idea is a disaster. And Management " Unfortunately we gonna have to let some employees go " while keeping their jobs.

I'm certain that the old CEO got a nice payday when he left these monster don't care if they ruins the life of their workers.

@Art_Vandelay The idea always has been growth unending growth and to keep it going they need to make insane decisions and the consequences are for the workers.