Unity To Lay Off 265 Employees At Weta Digital As Part Of "Company Reset"

Unity has announced a round of layoffs and the closure of Weta Digital, after it decided to end its agreement with Peter Jackson's Weta FX. The layoffs will impact 265 employees, a total of 3.8% of its workforce, Reuters reports.

Back in December 2021, Unity acquired a part of Peter Jackson's Weta Digital, including "Weta Digital's tools, pipeline, technology, and engineering talent" in a deal worth $1.625 billion. The remainder of Weta Digital remained under Jackson's ownership and rebranded to Weta FX, with the company maintaining an agreement to use Weta Digital's tools and services.

Now, Unity says it has terminated the professional services part of this agreement, which will result in the layoffs of 265 employees involved in the agreement. Weta FX issued a statement to FX Guide, saying it would be looking to re-hire as much of the Weta Digital team as possible. Unity will retain ownership of the tools it acquired, and they will remain readily available for Weta FX to use.

"Unity believes the Weta Digital team are remarkable, but Unity needs to become leaner as it focuses its expertise on its core business," the statement says, explaining why this decision was made. "It also believes it makes more sense for Weta FX to own full end-to-end production activities directly. Unity will be focusing its expertise and people on other matters, and Weta FX will be getting support for its use of the Weta Tools directly from its own crew--a shorter path which makes sense for both companies."

The move has been called a "company reset" by Unity, with the company looking to refocus on its core business of game development. Unity will also look to reduce its office footprint as a cost-cutting measure, shutting down offices in 14 locations including Berlin and Singapore. The company will encourage employees to work from home more often, removing mandatory in-office days for employees, and reducing "full in-office services" to just three days a week.

The layoffs come at a tumultuous time for the company, after it tried to introduce the unpopular Runtime Fee to make up revenue. The fallout from that announcement saw developers across the industry denounce Unity, along with a steep drop in share price, and CEO John Riccitiello stepped away from the company.

Unity employees have already faced layoffs once this year, with 8% of its workforce laid off in May in a move the company said was necessary for "higher growth."