Embracer Group has already conducted layoffs at several first-party developers. It seems that Cryptic Studios and  Zen Studios are the latest teams to be affected by the ongoing restructuring.

Cryptic Studios and Zen Studios appear to be hit with layoffs as part of Embracer Group's restructuring

Neverwinter (left), Pinbal FX (right)

Possible layoffs at Cryptic Studios

As spotted by Timur222 on X (former Twitter), several Cryptic Studios employees have posted on LinkedIn that they were recently laid off. This includes gameplay engineer David Nishball, senior technical artist Crhis Penny, and senior game designer Jesse Heinig.

The extent of the cuts is unclear, but overall, Cryptic Studios currently employs just under 180 people (via its LinkedIn).

It is worth noting that some employees clarified that they haven’t lost their jobs yet. But judging by different posts (most of them were written on Friday), it seems that dozens of Cryptic staffers are now looking for roles at other companies.

Among them are several artists, senior community manager Mike Fatum, sound designer Nigel A. Wilson, lead engineer Andy Maurer, and more.

“When everyone around you is facing such a tumultuous and chaotic future, how can you remain optimistic?” staff tech analyst Robert Mann wrote. “It is very difficult. As has been the norm as of late with a heartbreaking amount of other people, I am open to discuss possibilities and try to figure out the next step.”

Founded in 2000, Cryptic Studios is best known for MMO games like City of Heroes, Star Trek Online, and Neverwinter. It remained independent until 2008 when it was acquired by Atari. In 2011, Perfect World Entertainment snapped up the studio for an undisclosed sum.

Embracer Group became the new owner of Cryptic Studios in February 2022 after completing its acquisition of Perfect World Entertainment. The developer became a subsidiary of Gearbox, which is one of the operative groups within the Swedish holding company.

Layoffs at Zen Studios

Zen Studios was another developer that was hit with layoffs last week. “On Fridary the 13th, I was fired from my current job together with more than 30 other colleagues,” former community manager Adam Dienes wrote on X.

According to videogamelayoffs.com, which tracks layoffs in the games industry, the latest cuts affected 32 people. This could be a major blow to a relatively small company, which has just over 80 employees (via LinkedIn).

Founded in 2003, Zen Studios has developed numerous pinball games, including Pinball FX, Zen Pinball, and those with licensed characters from popular franchises. Last year, it released Circus Electrique, which combined Darkest Dungeon-like combat with circus management elements.

Zen Studios was acquired by Embracer Group in 2020 through Saber Interactive. Here is what the studio’s COO Mel Kirk told us about the operation under the Swedish holding company: “Life at Zen is much the same today as it was before the acquisition. The only real difference is that we are empowered to think bigger, we have more resources, and we have the ability to start transforming our developments into larger-scale projects. The natural progression for business opportunities and responsibilities is that things are steadily getting bigger and bigger, with more opportunities for success.”

How many Embracer-owned studios have already been affected by layoffs?

Since Embracer Group announced a restructuring program in June, it has laid off over 300 people (at least) across eight internal studios:

The goal of the program is to reduce the company’s net debt from SEK 16.75 billion ($1.53 billion) to at least SEK 8 billion ($732 million) by March 31, 2024. As Embracer CEO Lars Wingefors told investors last month, more layoffs may happen until the deadline: “We ultimately are making decisions to either restructure or downsize some teams, and there will be a few cases of closures. It’s difficult and it takes time, but we announced this in June and now we’re at the end of September and we’re confident to deliver on the targets we set out for the end of the fiscal year.”

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