Embracer Group To Downsize With Studio Closures And Staff Layoffs

Published: June 13, 2023 8:34 AM /


The Embracer Group logo overlaid on a screenshot of Warhammer 40k: Space Marine 2

Embracer Group, the major holdings company responsible for big publishers like Deep Silver and THQ Nordic, has announced plans for a "comprehensive restructuring program with immediate implementation". This decision will involve staff layoffs, as well as studio closures, company consolidation, and more.

In a press release on its website, Embracer CEO Lars Wingefors says the restructuring is intended to help Embracer "better optimize the use of [its] resources". The key components of the restructure include a "reduction of general overhead" costs, as well as studio closures and terminations of projects "that have not yet been announced and with low projected returns".

It's not clear which studios Embracer intends to close, but you can breathe easy if you're a Tomb Raider or Perfect Dark fan. Crystal Dynamics took to Twitter earlier today to reassure fans that its collaboration with The Initiative on Perfect Dark remains unaffected by Embracer's announcement, as does the Tomb Raider game currently in the works with Amazon Games.

Wingefors also released an open letter on the Embracer website in which he addresses the group's staff. In that letter, he says that Embracer's 17,000-strong staff count "will be lower by the end of the year", but that he doesn't know by how much. He says it's "painful" to see this happen, but that the group will endeavor to ensure those affected receive all the information and assistance they can.

The player shooting at a massive hulking monstrosity in Remnant 2, a game published by Embracer Group studio Gearbox
Embracer's upcoming slate of games includes Remnant 2Warhammer 40k: Space Marine 2, and more.

Wingefors' open letter also reiterates that some studios will be closed or divested and that some ongoing game projects will either be paused or terminated. In addition, Wingefors confirms Embracer is looking to "reduce third-party publishing" and focus on its internal IP, as well as obtaining external funding for bigger-budget projects.

While Embracer doesn't outright state the reason for this decision, the studio did reveal that a major $2 billion partnership fell through back in May, and it's likely that the loss of that potential capital has led to Embracer needing to make changes quickly. Embracer is also well-known for its acquisition-hungry nature; the studio's previous purchases include IPs like The Lord of the Rings, as well as studios like Crystal Dynamics, tabletop giant Asmodee, and many more.

This also might not be the first sign that all is not well at castle Embracer. Back in November 2022, Embracer shut down Onoma, formerly known as Square Enix Montreal, just a few months after acquiring said studio and rebranding it. The reason wasn't entirely clear, but many speculated that this decision was taken due to a need to save on costs, which could be related to Embracer's current predicament.

What does Embracer's downsizing operation mean in practical terms? Well, the studio's upcoming slate of already-announced games remains fairly unchanged, it seems. Titles like Remnant 2Warhammer 40k: Space Marine 2, and Alone in the Dark are still on their way, and Wingefors says that this year will be "solid" thanks to these "amazing" releases (and others on Embracer's slate). Still, you should probably expect some of the studio's 31 AAA games currently in the pipeline to be canceled or shifted around. We'll bring you more on this as soon as we get it.


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