Sweden's Embracer Group is enacting a plan to restructure the company.
In an open letter, CEO Lars Wingefors said that this will transform the firm from an investment-heavy business to one that boasts a high cash flow generation. The plan is split into several parts – the first will look for ways to cut costs across Embracer, while the second is figuring out how to go about that. The final part is consolidation.
Embracer currently employs around 17,000 people, with Wingefors saying that there are going to be job cuts. He also says that some of the companies in its portfolio might be closed to sold, while game projects might also be axed. Embracer is going to put greater emphasis on first-party titles rather than third-party publishing.
"It is painful to see talented team members leave. Our people are what make up the very fabric of Embracer. I understand and respect that many of you will be worried about your own position and I don’t have all the answers to all questions. I want to be clear that the decisions about this program were not taken lightly," Wingefors said.
"I am asking all our managers to lead and act with compassion, respect, and integrity. Throughout each phase and wherever possible, we will work to ensure that affected team members receive information first. Where we can, we will try to provide opportunities for our colleagues to transition onto other projects. It’s important to note that while we are removing roles in some companies, we will continue to hire in others. We know, understand and respect that this is a challenging time for every person impacted. For me communication and transparency are key, but it’s also an increasingly difficult challenge in matters such as this program
"The reality is that the quicker we act, the sooner we emerge as a stronger company."
Embracer is also making some changes to management. Saber CEO Matt Karch is stepping down, with COO Andrey Iones filling his shoes. Phil Rogers, CEO of Crystal Dynamics, has been promoted to interim chief strategy officer, too.
This comes in the wake of roughly a decade of increasing acquisitions for Embracer Group – and before it, Nordic Games and THQ Nordic. The company's stock dropped 44 per cent last month after it emerged that a partnership which would have represented $2 billion in dev revenue over six years had fallen apart.