It’s been a roller coaster ride for Unity these past weeks, after the enduring nightmare of their proposed Runtime Fee introduction and it’s gradual tempering, the mood had taken a slight upswing at their recent Unite event, featuring the reveal of Unity 6 and future AI plans and the first airing of their new CEO with a fresh apology.

However, it seems that Unity’s rocky road continues following last week's scene-setting softener with today’s announcement that the company will be eliminating 265 jobs, representing 3.8% of its total workforce. Most surprising is that these layoffs are at Weta, the special effects house the company bought in December 2021 in a deal worth $1.625 billion.

At the time Unity announced that they were acquiring "Weta Digital's tools, pipeline, technology, and engineering talent" with the rest of the company renaming to Weta FX and still being in the ownership of movie director Peter Jackson. It appears that now, as part of their “company reset” this engineering talent is no longer required at Unity as it terminates “the professional services part of this agreement”.

Unity’s latest report filing confirms that, “On November 25, 2023, as part of the Company’s previously announced plans to focus on its core businesses, the Company amended certain of its agreements with Weta FX Limited, under which the Company terminated its obligations to provide certain services to Weta FX and also amended certain intellectual property rights between the parties.

"The Company will recognize deferred revenue and additional consideration in connection with the amendments of approximately $114 million, and will expense the recorded cost of a related contract intangible asset of approximately $131 million, which will occur in the fourth quarter of 2023.”

Now Weta seeks to re-employ its employees

Speaking to FXGuide a Weta spokesman has expressed the company’s intent to re-hire as many of the Weta Digital team as it can, while Unity will retain ownership of the tools tech it acquired and will continue offering these services to Weta FX.

"Unity believes the Weta Digital team are remarkable, but Unity needs to become leaner as it focuses its expertise on its core business," Unity said in a statement. "It also believes it makes more sense for Weta FX to own full end-to-end production activities directly. Unity will be focusing its expertise and people on other matters, and Weta FX will be getting support for its use of the Weta Tools directly from its own crew – a shorter path which makes sense for both companies."

The layoffs at Unity follow previous layoffs in May this year with 600 jobs being axed.