It’s only mid-February but already we have a lead contender for most vile CEO quote of 2024: Embracer Group’s third quarter fiscal report is out, and in it we’re seeing the continued effects of the company’s failed $2B gambit with Saudi Arabia’s Savvy Games, which kicked off stock value dips, restructuring, and layoffs, all topped off with CEO Lars Wingefors affirming that those layoffs were in service of investor board appeasement.
The financial report confirmed that another 483 workers were given pink slips during the last quarter, which amounts to a total of 1,387 layoffs in the second and third quarters of 2023 – a reduction of eight per cent of Embracer’s workforce. And while Embracer recorded a four per cent YoY increase in Q3 net sales to $1.15B, the company is projecting it will fall short of its attempts to bring net debt down to its targeted $761.6M by the end of the fiscal year.
“[Embracer’s] overruling principle is to always maximize shareholder value in any given situation,” Wingefors is quoted as saying in the report. “With the actions that we are now taking, we are creating a strong foundation for the future, with an improved financial profile, and a more streamlined structure, while leveraging the potential of our diversified portfolio.”
On the subject of those future actions, it appears that more layoffs and selling off owned studios will continue on, with the report confirming pursuit of “certain divestiture processes,” some of which are at “mature stages,” while also noting that “certain companies might initiate restructuring before any divestment is announced” as it continues to try to drive down net debt.
The company also promised to be more selective in any third-party publishing deals in the future, with a focus on “established, owned IPs and studios which [it is] confident will generate better predictability as well as increased ROI and profitability going forward.” It’s here that we remind our readers that Embracer moved Cryptic Studios – and its MMOs Star Trek Online, Champions Online, and Neverwinter – from Gearbox to DECA Games last November, a Berlin-based branch of Embracer that focuses on “acquiring and operating older free-to-play games as a service.”
