Embracer cut ties with more than 4,500 employees and cancelled 80 projects over the past year

Swedish conglomerate Embracer Group reduced its headcount by 4,532 employees over the past year.

As noted in the company's fiscal report for the year ended March 31, 2024, Embracer's total headcount dropped by 27 percent to 12,069 employees in Q4 FY24—down from 16,601 in Q4 FY23.

Embracer explained 3,727 of those departures were "game developers" and noted it also cancelled 80 game projects during that time.

That colossal headcount reduction comes with Embracer having completed a sweeping restructuring program that resulted in widespread layoffs, studio closures, project cancellations and huge divestments—including the sale of Gearbox Entertainment and Saber Interactive.

Embracer is now preparing to begin a "new chapter" that will see it split its business into three individual, publicly listed entities. The company intends to release 70 projects during the current fiscal year ending in March 2025, including "at least three important unannounced titles."

In its latest financials, Embracer said that process is "tracking according to plan" and will unleash "significant untapped potential within the group."

As for how the business performed over the past year, Embracer saw full-year net sales increase by 12 percent to SEK 42.2 billion ($3.94 billion).

Breaking that total down per operating segment, PC/Console Games sales increased by 7 percent to SEK 14.4 billion and Mobile Games sales increased by 2 percent to SEK 5.9 billion.

Tabletop Games delivered net sales of SEK 14.7 billion, an increase of 13 percent year-on-year, and Entertainment and Services net sales increased by 34 percent to SEK 7.1 billion.

Embracer boss claims 'transformative' year can usher in new chapter

Commenting on those results, Embracer CEO Lars Wingefors said titles such as Tomb Raider I-III Remastered and Deep Rock Galactic: Survivor did "well," but noted other mid-sized releases from THQ Nordic delivered "mixed" performances.

"We remain excited about our PC/Console pipeline over the coming years. Our resources within PC/Console are increasingly focused towards our own and controlled key IPs, such as Darksiders, Dead Island, Deep Rock Galactic, Kingdom Come: Deliverance, Killing Floor, The Lord of the Rings, Metro, Remnant, Satisfactory, Tomb Raider, Wreckfest and many others," added Wingefors.

"Through this year and next, we expect our updated capital allocation process, with improved standards for new and continued investment, to drive improving ROI from new game releases, as our pipeline increasingly consists of higher quality games."

Wingefors feels The Lords of the Rings franchise can become a "key driver" for Embracer in the coming decades, and described the past 12 months as "transformative."

"The restructuring program, that is now successfully finalized, has created a stronger foundation for improved profitability, cash flows and long-term value creation," he continued.

"Throughout the past year, our companies and studios have had to part ways with team members. These were necessary but difficult decisions, and it has been important to carry out the changes with compassion, respect and integrity towards those affected. Post-restructuring, we will strive to make continuous improvements as part of our ordinary business, to further improve operational efficiency and capital allocation."

He said Embracer is now preparing to embark upon a "new and exciting chapter" across its business, positing "the best is still ahead of us."