Unity has announced layoffs and the closure of Weta Digital after deciding to terminate its agreement with Peter Jackson’s Weta FX. The layoffs will affect 265 employees, a total of 3.8% of the workforce, according to Reuters.
Back in December 2021, Unity acquired part of Peter Jackson’s Weta Digital, including Weta Digital’s “tools, pipeline, technology and engineering talent” in a deal valued at $1.625 billion. The rest of Weta Digital remained under Jackson’s ownership and was renamed Weta FX, with the company retaining an agreement to use Weta Digital’s tools and services.
Unity now says it has terminated part of that professional services agreement, which will result in the layoff of 265 employees involved in the agreement. Weta FX issued a statement to FX Guide saying that it will be looking to re-hire as many members of the Weta Digital team as possible. Unity will retain ownership of purchased instruments and they will remain available for use by Weta FX.
“Unity believes the team at Weta Digital is great, but Unity needs to become leaner as it focuses its expertise on its core business,” the statement said, explaining why the decision was made. “He also believes that it makes more sense for Weta FX to own the full end-to-end production operation directly. Unity will focus its expertise and people on other matters, and Weta FX will receive support to use Weta Tools directly. from our own crew is a shorter route that makes sense for both companies.”
Unity called the move a “company reboot” as the company looks to refocus on its core business of game development. Unity will also look to reduce office space as a cost-cutting measure, closing offices in 14 locations, including Berlin and Singapore. The company will encourage employees to work from home more often, eliminating mandatory work days for employees and reducing “full office service” to just three days a week.
The layoffs come at a tumultuous time for the company, after it tried to introduce an unpopular hourly fee to offset profits. As a result of the announcement, developers from across the industry condemned Unity along with a sharp drop in its stock price and forced CEO John Riccittiello to leave the company.
Unity employees have already faced layoffs this year, laying off 8% of employees in May, which the company said was necessary for “more growth.”
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