"The need for Thunderful to enact these changes stems primarily from over-investments made in the last few years."
Swedish conglomerate Thunderful Group is making around 20 percent of its workforce redundant after overspending in recent years.
The company has published titles like Planet of Lana, Somerville, and Steamworld Build and owns multiple studios including Image & Form, Jumpship, and Guru Games.
It has spent the past few years acquiring and investing in game companies to expand its arsenal, but much like Embracer Group now claims it must downsize to become sustainable.
Outlining its position in a press release, Thunderful said it's implementing a restructuring program to strengthen its "long-term competitive position" and claimed it will strive to lower costs and refocus its business on areas with the best "future growth and profitability prospects."
"Actions will include both significant staff reductions and evaluation of divestment of non-strategic assets," it added. "The need for Thunderful to enact these changes stems primarily from over-investments made in the last few years.
"These investments have proven unsustainable given the current industry climate, which has resulted in the Group being particularly affected by challenging market conditions. The new management team and the board of directors have identified the need to restructure the Group and focus its efforts on the strategic assets with the best long-term prospects."
Thunderful is looking to deliver annual cost reductions of between 90 million to 100 million SEK (up to $9.5 million) and expects the fiscal impact of its restructuring plan to take effect in the second half of 2024.
The company will spend between 30 million to 40 million SEK (up to $3.8 million) to enact that plan and expects 20 percent of its workforce to be impacted by the cuts.
"Since I joined as CEO in the fall of 2023, we have evaluated the current business and the future position of Thunderful,” said CEO Martin Walfisz. "To ensure and strengthen the viability of the Group, we have found no alternative other than to reduce costs and focus the business on areas with the best future growth and profitability prospects.
"It has been difficult to make these decisions, and it saddens me that we will have to say goodbye to many skilled colleagues and partners. Nevertheless, I am convinced that this is a necessary direction for Thunderful and that these changes will make the company a stronger player in the market."
It's brutal out there for game developers right now. 2023 ushered in a huge wave of layoffs as major companies like Meta, Unity, Epic Games, Embracer Group and many more cut jobs in the name of things like sustainability, profitability, and shareholder value.
That wave of layoffs has now spilled into 2024, with thousands of people having already lost their jobs this year despite it only being 17 days old.
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