Embracer Group Reduced Its Headcount by 2000 Last Year

Embracer Group slashed 2,000 internal jobs in the past year.. The move brings the company’s internal development headcount down to 5,378—a staggering fall from 7,180 just 12 months ago.

As revealed in Embracer’s latest annual report, the layoffs are part of a larger corporate shakeup that’s seen the company splinter itself into three parts: Asmodee, Coffee Stain & Friends, and a rebranded core group now called Fellowship Entertainment. The goal? Cut costs, streamline operations, and stop bleeding money after its unchecked buying spree.

The majority of job losses came from the PC/Console division, which shed over 1,400 employees, dropping from 6,404 to 4,918. Mobile wasn’t spared either, with headcount falling by 30%, mostly due to Embracer offloading Easybrain.

“We have had to make some difficult but necessary team changes…primarily within PC/Console publishing and distribution, as well as work-for-hire development,” said CEO Lars Wingefors. 

The cuts also impacted studio count. Embracer now owns 62 internal studios, down from 73. That’s a huge step back for a company that, not long ago, seemed dead set on owning half the industry.

In the middle of this downsizing, Kingdom Come: Deliverance II, developed by Embracer-owned Warhorse Studios, launched in February 2025 and sold over three million copies in three months. It’s one of the group’s biggest hits in years. However, owing to Embracer’s enormous size, this was clearly not enough to stop the divestment drive. 

The group's PC/Console segment still posted negative EBIT of SEK 3.9 billion (~$370 million loss). Even the SEK 1.89 billion in adjusted EBIT came mostly from fewer write-downs, not a surge in profit.

Between 2020 and 2022, Embracer Group was constantly in the news for buying up studios, IPs, and publishers left and right. That includes Crystal Dynamics, Gearbox, and even the rights to The Lord of the Rings.

But the wheels came off when a rumored $2 billion deal (widely believed to involve Saudi-backed Savvy Games) fell through in mid-2023. Since then, it's been pure damage control, with cancelled projects, closed studios, and mass layoffs. “The transformation will enable each company to fully utilize its own balance sheet and optimal financing structures,” Embracer said in the report.

With Asmodee already spun off and Coffee Stain Group next in line, Embracer’s plan is to go lean. The rest of the business—including IPs like Tomb Raider, Dead Island, and The Lord of the Rings—will be rolled into Fellowship Entertainment, a more tightly controlled, IP-led operation.

The new model is all about trimming fat, betting on fewer blockbuster titles, and getting more out of what it already owns. However, this entails fewer risks, fewer experiments, and fewer jobs.

Embracer’s 2,000-person layoff may be one of the biggest, but it’s not the only one. We have seen a bloodbath across the whole video game industry in the past year, with companies like Riot, EA, Microsoft, Take-Two, and others cutting thousands of jobs.

But Embracer stands out for how fast things fell apart. It went from an empire in the making to a textbook case of overexpansion. And the people hit hardest weren’t the executives, but the workers whose projects were axed and careers upended.