Swedish video game and media holding company Embracer Group announced a comprehensive restructuring program for FY 2023/24, running until the end of March 2024. The program includes the closing of studios and termination of projects, and job losses.
Embracer has posted an open letter and shared the restructuring program in detail. The company will aim to increase cash conversion, improve efficiency and reduce capex by taking operational and financial measures. Embracer aims to reach a financial net debt below SEK 10 billion ($938 million) by the end of the financial year 2023/24.
The company also appointed Matthew Karch as interim Chief Operating Officer and appointed Phil Rogers as interim Chief Strategy Officer. Karch and Rogers will co-lead the program planning and implementation.
Lars Wingefors, CEO and Co-Founder of Embracer, said:
“Today we announce a comprehensive restructuring program that will enable us to realize untapped potential in Embracer Group and better optimize the use of our resources. Across the group, we are now initiating multiple actions to strengthen our cash flow generation and leverage our portfolio of IPs to become a stronger company and setting out on a stable future to build even greater games to the benefit of gamers and fans across the globe ”, says Lars Wingefors, CEO and co-founder of Embracer.
The program is also estimated to reduce overhead costs by at least 10%, or at least SEK 0.8 billion on a yearly basis, compared to the annualized run-rate in Q4 2022/23. The program is expected to be fully implemented by 1 October 2023 and to reduce overhead costs by SEK 0.4 billion in FY 2023/24.
Embracer will close studios and terminate projects that have not yet been announced and with low projected returns. This will lead to the termination of many employee contracts, but no further information has been given yet.
The company will also reduce investments in external development and focus on internal development based on owned or controlled IP. The Swedish giant has The Lord of the Rings, Tomb Raider, Saints Row, Borderlands, Deus Ex, and many more successful IPs in its portfolio.
Embracer Group has 138 internal game development studios and is engaging more than 16,600 employees in more than 40 countries.
