Unity spent $205 million eliminating 25 percent of its workforce

Unity has confirmed the mass layoffs it announced in January incurred around $205 million in separation and restructuring costs over the past nine months.

In its latest fiscal report, the company explained those costs included $127 million in incremental stock-based compensation.

“Of the incremental employee separation costs, $15 million are within cost of revenue, $46 million are within research and development, $52 million are within sales and marketing, and $92 million are within general and administrative,” said Unity.

“Additionally, in November 2023, we committed to a plan to reassess our real estate footprint. We incurred $45 million of restructuring costs, primarily related to office closures in the nine months ended September 30, 2024.”

Unity is currently attempting to turn around its business after invoking the wrath of game developers with the calamitous introduction of the (now scrapped) Runtime Fee. The botched rollout resulted in a huge backlash and eventually led to the departure of key executives including CEO John Riccitiello, who left his post in October 2023.

Riccitiello was replaced by current CEO Matt Bromberg, who killed the Runtime Fee outright and appointed a new C-suite in a bid to repair the company’s reputation within the development community.

Unity’s “clear focus” included redundanciesIn November last year, interim CEO Jim Whitehurst told Unity investors the company planned to implement a “customer-first” business model and establish a “clear focus.” That plan quickly resulted in redundancies that Unity claimed would reignite revenue growth and deliver “healthy financials.”

Looking at Unity’s earnings for the quarter ended September 30, 2024, revenue dropped to $446.5 million from 544.2 million year-over-year. Operating expenses decreased to 461.6 million from 520.3 million over the same period. The company posted a net loss of 124.5 million during Q3, with that figure remaining relatively flat year-on-year.

Unity explained it had 1,242 and 1,230 customers contributing more than $100,000 during the trailing 12 months of September 30, 2024, and 2023 respectively.

It said that marginal increase was largely a result of “subscriptions growth,” and noted that while those customers represented the “substantial majority” of revenue for the nine months ended September 30, 2024 and 2023, respectively, “no one customer accounted for more than 10 percent of our revenue for either period.”

About the Author

News Editor, GameDeveloper.com

Game Developer news editor Chris Kerr is an award-winning journalist and reporter with over a decade of experience in the game industry. His byline has appeared in notable print and digital publications including Edge, Stuff, Wireframe, International Business Times, and PocketGamer.biz. Throughout his career, Chris has covered major industry events including GDC, PAX Australia, Gamescom, Paris Games Week, and Develop Brighton. He has featured on the judging panel at The Develop Star Awards on multiple occasions and appeared on BBC Radio 5 Live to discuss breaking news.