Unity has decided to terminate an agreement with its subsidiary Weta, a VFX studio co-founded by acclaimed filmmaker Peter Jackson. This will result in another round of layoffs for the engine maker.
What happened?
Unity officially announced the changes in a SEC filing on November 28. As reported by Reuters, the termination of the company’s agreement with Wētā FX (fka Weta Digital) will affect 265 employees, or 3.8% of its total workforce of around 7,000.
In 2021, Unity paid $1.62 billion to acquire Weta, including its artist tools, IP, core pipeline, and engineering team. But the company has now amended certain of its agreements with the VFX studio and “terminated its obligations to provide certain services to Wētā FX and also amended certain intellectual property rights between the parties.”
Earlier this year, Unity laid off roughly 600 employees, in addition to several hundreds of people that were let go in January 2023. Overall, the company cut over 1,100 jobs this year, and even more layoffs could be made before March 31, 2024.
In addition, Unity plans to close corporate offices in approximately 14 locations, including Berlin and Singapore. It will also significantly reduce the real estate footprint of its San Francisco and Bellevue, Washington headquarters.
As a result, employees impacted by the office closures will have an option to become fully remote, “with the exception of specific roles which are location-dependent.”
Unity’s portfolio review continues
Earlier this month, Unity announced a “comprehensive assessment” of its product portfolio as part of its plans to focus on its core businesses and deliver faster revenue growth and improved profitability metrics.
As the company explained at the time, “this will likely include discontinuing certain product offerings, reducing our workforce, and reducing our office footprint.” So the layoffs at Weta and office closures are likely part of this process.
Jim Whitehurst, who took on the role of interim CEO of Unity following the resignation of John Riccitiello, told Reuters that the company has more changes in store. “While no additions have been finalized, it’s clear that we will reduce the number of things we are doing overall,” he noted.