It comes as no surprise that the video game industry witnesses yet another round of layoffs and restructuring. This time, it is the Swedish conglomerate Thunderful Group AB that has made an announcement to lay off approximately 20 percent of its workforce. The move is part of a restructuring program aimed at reducing costs and refocusing efforts on areas with higher growth and profitability prospects.
According to a press release, Thunderful Group attributes the need for such changes to their previous over-investments and the challenging market conditions. The company’s new management team and board of directors have identified the necessity to reshape the group by concentrating on strategic assets that offer promising long-term prospects. This acknowledgement demonstrates a sense of responsibility for the unsustainable spending decisions made in recent years.
To achieve its objectives, Thunderful Group plans to make annual cost reductions of 90 to 100 million SEK (up to $7.5 million). The company also expects to allocate 30 to 40 million SEK (up to $3 million) towards the restructuring process. These actions are projected to have a noticeable impact in the second half of 2024. The CEO, Martin Walfisz, who assumed the role in late 2023, expressed his commitment to ensuring the group’s viability and resilience amidst these changes.
Originally established as Thunderful AB in December 2017, the company merged with Bergsala Holding in December 2019 to form Thunderful Group AB. Since then, Thunderful Group has made a series of acquisitions, including Guru Games, Coatsink, Station Interactive, Headup Games, new indie To The Sky, Stage Clear Studios, Early Morning Studio, and most recently Jumpship. Prior to the layoffs, Thunderful Group employed around 480 people.
Thunderful Group will be hosting a live webcast on January 17, 2024, to provide further details and updates regarding the restructuring program. This webcast aims to keep employees, partners, and stakeholders informed about the changes taking place within the organization. The company’s CEO, Martin Walfisz, expressed his regret over the necessity to let go of skilled colleagues and partners. However, he remains optimistic that these changes will ultimately strengthen Thunderful Group’s position in the market.
Thunderful Group’s admission of over-investment aligns with a broader trend seen in the video game industry during 2023. Industry giants such as Epic and Twitch have also acknowledged their own overly optimistic planning during a period of artificial growth caused by pandemic-related lockdowns. However, these executives have seemingly faced little material consequence for their mistakes.
It is worth noting that Thunderful Group’s layoffs, while significant, pale in comparison to those carried out by another Swedish conglomerate, Embracer. The latter laid off over 900 employees during the previous summer and is still undergoing restructuring. The challenges faced by Thunderful Group and Embracer highlight the volatile and competitive nature of the industry.
Thunderful Group’s decision to implement layoffs and a restructuring program reflects the company’s acknowledgment of over-investment and the need to adapt to challenging market conditions. The aim is to reduce costs and focus on areas with higher growth potential. As with any major organizational changes, there will undoubtedly be a degree of uncertainty and difficulty for those affected. However, it is hoped that these measures will ultimately secure Thunderful Group’s future and establish them as a stronger competitor in the industry.
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