General Gaming Embracer Group reports that its restructuring program (global workforce reduced by 8%) is in its "final stretch" but is unlikely to meet its debt reduction target

[Commissar SFLUFAN]

Embracer restructuring nears "final stretch" but unlikely to reach net debt target by March

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Sign up for the GI Daily here to get the biggest news straight to your inboxEmbracer Group has released its latest fina…

 

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Embracer Group has released its latest financial results and offered an updated on its ongoing restructuring program, which the company claims is "approaching the final stretch."

 

The results for the three months ending December 31, 2023 showed decent sales across the company, despite declines in its PC/console games segment, but the group still ended the year with a net debt of SEK 16.1 billion ($1.5 billion).

 

The restructuring program aimed to bring this down to SEK 8 billion ($762.1 million) by the end of the fiscal year on March 31, 2024, but CEO Lars Wingefors said the company is "unlikely" to reach this target.

 

 

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Looking at the company's headcount, Embracer's report showed that 1,387 people have been laid off since restructuring began in June, representing 8% of the group's global workforce.

 

This does not include the workers affected by job cuts that have been implemented since the start of the year, which have impacted Eidos Montreal, Black Forest Games, Lost Boys Interactive, and Nimble Giant Entertainment.

 

483 jobs were cut during Q3, a step down from the 900-plus between June and September.

 

At the end of Embracer's previous financial year, the group employed 16,243 people, of which 11,152 were game developers. By the end of 2023, this had lowered to 15,218 people, of which 10,221 were game developers.

 

Embracer also showed how many game development projects have been scrapped, bringing the number of titles in the pipeline down from 224 at the end of 2022 to 179.

 

 

There is absolutely no chance of meeting that debt target without asset divestment.

[AbsolutSurgen]

They don't generate anywhere enough cash to reduce debt by that much.

[Firewithin]

the shareholders must get their sacrifices! 

[XxEvil AshxX]

Pretty tight fisted with those IP's though. If they can't have them, no one can!

[Mr.Vic20]

Embracer: The Horror

[legend]

I think Larian has become my favorite developer.

 

'We don't have shareholders, but we also don't think about them,' Larian Studios uses its stage time at the DICE Awards to speak out against a brutal industry climate | PC Gamer

WWW.PCGAMER.COM

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"Building games that are actually fun is going to make you the most money, that's it."

 

[Mr.Vic20]

1 minute ago, legend said:

I think Larian has become my favorite developer.

 

'We don't have shareholders, but we also don't think about them,' Larian Studios uses its stage time at the DICE Awards to speak out against a brutal industry climate | PC Gamer

WWW.PCGAMER.COM

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"Building games that are actually fun is going to make you the most money, that's it."

 

Yeah, hard not to love them when they are smart and passionate about what they say and have taken Bioware's seat at the table. 

[AbsolutSurgen]

It's easy to to talk about not having to lay off employees when you are cash flush from a best selling game.

[Commissar SFLUFAN]

2 minutes ago, legend said:

I think Larian has become my favorite developer.

 

'We don't have shareholders, but we also don't think about them,' Larian Studios uses its stage time at the DICE Awards to speak out against a brutal industry climate | PC Gamer

WWW.PCGAMER.COM

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"Building games that are actually fun is going to make you the most money, that's it."

 

 

Ehhhhhhh...that's kinda/sorta bending the truth a bit.

 

Larian absolutely does have "shareholders" (Tencent owns 30%) - it's just that they're "private" shareholders, not "public" ones.

 

 

[Mr.Vic20]

Just now, Commissar SFLUFAN said:

 

 

Ehhhhhhh...that's kinda/sorta bending the truth a bit.

 

Larian absolutely does have "shareholders" (Tencent owns 30%) - it's just that they're "private" shareholders, not "public" ones.

 

 

Damn, I forgot that 10 cent owns a bit of everyone! 

[legend]

19 minutes ago, Commissar SFLUFAN said:

 

 

Ehhhhhhh...that's kinda/sorta bending the truth a bit.

 

Larian absolutely does have "shareholders" (Tencent owns 30%) - it's just that they're "private" shareholders, not "public" ones.

 

 

 

Sure, but I think their meaning stands. Tencent doesn't voting rights (according to the article) so they don't have to make decisions with them in mind.

[Commissar SFLUFAN]

3 minutes ago, legend said:

 

Sure, but I think their meaning stands. Tencent doesn't voting rights (according to the article) so they don't have to make decisions with them in mind.

 

They don't "have" to, but I'm sure they really, really don't want to piss off an entity that owns nearly 1/3 of the company to the point where that entity would decide to sell its stake which could very well cause a capital issue!

[legend]

1 minute ago, Commissar SFLUFAN said:

 

They don't "have" to, but I'm sure they really, really don't want to piss off an entity that owns nearly 1/3 of the company to the point where that entity would decide to sell its stake which could very well cause a capital issue!

 

I wouldn't be surprised if Swen told them to get fucked if they actually pushed on something he opposed strongly.

[Commissar SFLUFAN]

1 minute ago, legend said:

 

I wouldn't be surprised if Swen told them to get fucked if they actually pushed on something he opposed strongly.

 

Perhaps, but when confronted with actual financial reality for the company by following such a course of action...who knows?

[legend]

2 minutes ago, Commissar SFLUFAN said:

 

Perhaps, but when confronted with actual financial reality for the company by following such a course of action...who knows?

 

Yeah, I can't say for sure he would stay strong and veto it on principle even if would lead to ruin, but given the history of how he's run the company since the early days when he continued to push through financial problems, I could easily see him sticking to his guns.

[AbsolutSurgen]

Tencent is a sophisticated investor.  I am sure the conditions of their preferred stock are such that if Larian was in distress, the appropriate actions could be taken.