Niantic and Unity lay off hundreds of people
The economy is getting rougher. This is currently particularly noticeable in investment-intensive and growth-oriented projects in the technology sector and in companies with no or low profitability.
Unity in particular has been hit hard by the tech crash of recent months. The share price has lost around 70 percent of its value compared to its peak in November 2021.
The company, which is excellently positioned in the field of 3D engines and especially in the XR sector, but is still struggling with its unprofitable business model, is now drawing the first consequences and arming itself for an uncertain future.
Unity lays off hundreds of skilled workers
Unity confirms that around four percent of its workforce will have to leave, the exact number of employees is not known. On Linkedin, around 7,000 accounts have indicated Unity as an employer, so four percent would correspond to just under 300 people.
"As part of a continued planning process where we regularly assess our resourcing levels against our company priorities, we decided to realign some of our resources to better drive focus and support our long-term growth," Unity said in a statement.
Kotaku refers to internal sources and reports 300 to 400 layoffs worldwide. These are supposed to have taken place in all areas, but AI and engineering are said to have been hit particularly hard. Nick Statt from Protocol assumes slightly more than 200 layoffs based on the number of employees in 2021.
Niantic lays off eight percent of its workforce
Pokémon Go studio Niantic is laying off about eight percent of its workforce, or about 90 people. In parallel, Niantic is halting four projects, including the Transformer AR game "Heavy Metal." In an internal email to the staff, Niantic CEO John Hanke justifies the layoffs with "economic storms that may lie ahead."
Niantic does have a cash cow on its hands with Pokémon Go, which has brought the start-up billions in revenue since its launch in 2016. However, attempts to copy this success, for example with an AR game in the Harry Potter universe, failed.
With the AR development environment Lightship and a large-scale AR cloud project for a "real-world Metaverse", Niantic is trying to gain a foothold in the field of basic technology for the XR and Metaverse era. The company is also working on AR headsets.
However, these are long-term projects with an unclear outlook and plenty of competition - whether, when and to what extent they will become profitable is currently impossible to predict. In an uncertain economic environment with higher interest rates, Niantic will seem less attractive to investors.
"We recently decided to stop production on some projects and reduce our workforce by about 8% to focus on our key priorities," a company spokesperson tells Bloomberg.
Most recently, Niantic received a $300 million investment in November 2021 at a valuation of $9 billion. This estimate is likely to have dropped significantly recently.