Unity has announced a round of layoffs and the closure of Weta Digital after terminating its agreement with Peter Jackson's Weta FX. The layoffs will affect 265 employees, which is 3.8% of its workforce, according to Reuters.
In December 2021, Unity acquired a portion of Peter Jackson's Weta Digital, including "Weta Digital's tools, pipeline, technology, and engineering talent," in a deal valued at $1.625 billion. The remaining portion of Weta Digital remained under Jackson's ownership and was rebranded as Weta FX, with the company maintaining an agreement to utilize Weta Digital's tools and services.
Unity has ended the professional services part of the agreement, resulting in 265 employees being laid off. Weta FX plans to re-hire as many Weta Digital team members as possible. Unity will keep ownership of the tools acquired and will continue to make them available for Weta FX to use.
In a statement, Unity explained that while it values the Weta Digital team, it needs to streamline its operations and focus on its core business. Unity believes it is more practical for Weta FX to handle full end-to-end production activities directly. The company will shift its focus and resources to other matters, while Weta FX will receive support for using the Weta Tools directly from its own team, a more efficient approach for both companies.
Unity is undergoing a "company reset" to focus on game development, cutting costs by shutting down offices in 14 locations including Berlin and Singapore, and reducing in-office days to three days a week. This comes after a controversial attempt to introduce a Runtime Fee, which led to backlash and a drop in share price, prompting CEO John Riccitiello to step away.
Unity employees have already faced layoffs once this year, with 8% of its workforce laid off in May in a move the company said was necessary for "higher growth."
Editor's P/S
Unity's decision to restructure and lay off 265 employees at Weta Digital is a significant move that reflects the challenges facing the visual effects industry. The company's acquisition of Weta Digital's tools and technology in 2021 was seen as a major coup, but it appears that the integration of the two companies has not been as smooth as planned.
The layoffs come as Unity undergoes a "company reset" to focus on game development. This shift in focus is likely due to the increasing competition in the VFX industry, as well as the challenges of integrating Weta Digital's technology into Unity's own platform. It is unfortunate that 265 employees are losing their jobs, but it is clear that Unity is making the changes necessary to remain competitive in the rapidly evolving VFX landscape.