Unity (U) to discontinue products, reduce office space & lay off more workers

Unity’s (U) Q3 2023 earnings report was filled with interesting tidbits about the company behind the popular video game engine. This included information about how it’s altering its business model to sustain profitability for the foreseeable future and stay in the good graces of shareholders. Unfortunately, this means that Unity is prepping a reduction in operations, which means product discontinuations and more layoffs.

Unity shared the news on the fifth page of its earnings report today. The following quote outlines Unity’s plans to scale back in various areas of its business in the near future.

Source: Unity

We are committed to a customer-first business model. This business model is enabled by the right product portfolio, the right initiatives and clear focus. And when executed with excellence, this business model is designed to deliver faster revenue growth, improved profitability metrics and increased free cash flow. Several weeks ago, we started a comprehensive assessment of our product portfolio to focus on those products that are most valuable to our customers. We are also evaluating the right cost structure that aligns with the more focused portfolio. We are acting quickly and expect to make final decisions over the next few weeks. We expect to start implementing the plan within this quarter and expect to complete all interventions before the end of the first quarter of 2024. This will likely include discontinuing certain product offerings, reducing our workforce, and reducing our office footprint. The exact timing of these interventions is difficult to estimate. We are therefore not providing guidance for the fourth quarter or the full year 2023. We will provide guidance for 2024 with our fourth quarter and full year 2023 results. At that time, we will also share more details on our operational interventions, which are expected to gradually improve our results.

It’s unfortunate to hear that more layoffs are planned at another major video game company. The report also includes the news that Unity isn’t expecting its Runtime Fees to be beneficial for its business in the next quarter. Pay a visit to our market news page for more insightful financial news.