Digic, a Hungarian subsidiary of Embracer Group focused on 3D and CGI animation and game trailers, has laid off around 35 members of staff, representing around 10% of the workforce, reports Forbes.
This follows similar layoffs at another Hungarian subsidiary of Embracer, Zen Studios, earlier this month, with around 26% of employees losing their jobs.
Speaking to Forbes, Digic noted that the move comes alongside a “reorganisation with a reduction of staff”.
"Due to the market changes of the past period, economic challenges and the long-term arrangement for hybrid work, it has become necessary to review [our] operation".
"Digic would like to continue to employ some of the relevant colleagues on a fixed-term contract or on a project basis as freelance subcontractors, thus increasing the flexibility of the company's operation and the proportion of freelance experts," added a spokesperson for Embracer group.
Embracing change
The move was ordered by Embracer Group, which is itself undergoing a restructuring program following the collapse of a $2 billion dollar deal with Savvy Games Group. As part of this program, projects and studios are seemingly in the firing line, with the source adding that Digic in particular is “in a difficult situation since less and less video games require pre-rendered cinematic transitions”. With more and more studios creating transition animations in real time within the game engine, fewer and fewer are turning to external studios for this purpose.
However, Digic noted that “The reorganisation started before and regardless of the cuts within the Embracer group. Less than 5% of Digic's revenue came from Embracer group companies in 2023, and these projects were not even affected by the parent company's "restructuring program." With the company growing its workforce by 20% between 2019 and 2022, it appears that the company has fallen victim to the industry-wide normalisation following the unprecedented “covid boom”.
Earlier this month, Embracer was dropped from the top stocks list by S&P.
