Engine manufacturer Unity, which laid off 600 workers and closed several offices earlier this year, warned of the possibility of more layoffs in November 2023. In a filing with the SEC made today, the company confirmed that it will cut roughly 25% of its current workforce "in the interest of long-term, profitable growth." [Reuters reports that this is the fourth layoff in the past year and the largest ever at Unity. The layoffs, which will result in approximately 1,800 job losses, will affect "all teams, regions and areas of the business," Unity officials told Reuters, adding that more changes are coming to the company, but no details were given.

Unity was first released in 2005 and has grown into a phenomenally popular game engine. However, the last few years have not gone well: the company laid off 200 people in June 2022 and nearly 300 more in January 2023, and in September of the same year, it surprised developers by announcing a "Runtime Fee" that imposed a new charge on developers for each installation, which made things much worse. This led to a huge backlash from developers and ultimately forced longtime CEO John Riccitiello to resign

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However, according to interim CEO James Whitehurst in November 2023, that ill-considered idea was not actually at the root of Unity's current predicament. The solution to its problems, Whitehurst said, was to become "a leaner, more agile, faster-growing company," which of course meant job cuts.

"Today, as part of the corporate reset outlined in our November 9, 2023 shareholder letter, Unity announced that it has made the difficult decision to implement a workforce reduction targeting approximately 25% of its total workforce across all teams," a Unity spokesperson told PC Gamer. "This decision was not made lightly, and we are deeply appreciative of the dedication and contributions of the affected employees. We are committed to supporting our affected employees through this difficult transition. We appreciate the understanding and support of our community and stakeholders.

While the reduction in headcount was expected, the size of the layoffs is a shocking one-quarter of the total workforce. It also continues the pattern of instability that has plagued the gaming industry throughout 2023, with layoffs and closures ranging from large publishers to small studios during the year. But the job cuts appear to be having the desired effect: since Whitehurst announced a company reset in November 2023 and laid off another 265 employees, Unity's stock price has rebounded significantly. This is why.