Embracer Group have announced a restructuring programme intended to slash costs by 10%, or around $74.3 million.
The news - made in a press conference - comes off the back of disastrous Q4 financials for the company. Although Embracer’s Q4 financials were not, in isolation, terrible, they came at a time when a $2 billion deal was waiting in the wings for the conglomerate. However, at the eleventh-hour this deal fell through, and rather than having the mother of all silver-linings, CEO Lars Wingefor could only deliver bad news. Something that was reflected in the groups share price immediately afterward as their share price tumbled by 45%.
The restructuring will see Matthew Karch appointed interim chief operating officer and Phil Rogers interim chief strategy officer. For individual companies affected, the programme will be managed by their relevant CEO and management teams. The programme is intended to reduce the company’s debt to below SEK 10 billion ($928 million) by the end of full-year 2023/2024, and the entire programme will run till the end of full-year 2024/2025.
In an open letter, CEO Lars Wingefor stated, “There is significant untapped potential in Embracer which we will work together to unleash. We need to better leverage our scale, the quality of our portfolio and our capabilities. Our commitment to our transmedia strategy remains intact. That strategy alone has great potential to deliver substantial value across the group over the coming years.
“Ultimately, this will empower our entrepreneurs and creators to continue to deliver outstanding and memorable experiences to gamers and fans across the globe. I’m confident in our team’s ability to achieve results and maintain our position as a worldwide leader in the gaming industry,” he concluded.
Embracing change
While Embracer possesses holdings in almost all media, their recent business model has been heavy with costly acquisitions and this latest announcement indicates that changes to this strategy are on the way.
As for job cuts - a serial issue so far throughout 2022 and most of 2023 in the gaming industry - Embracer remains tight-lipped. “Embracer currently engages close to 17,000 people and while that number will be lower by the end of the year, it is too early to give an exact forecast on this.”
