Unity fire 265 people and end agreement with VFX studio Wētā FX in company "reset"

Unity are chopping 265 jobs - around 3.8% of their global workforce - and ending an agreement with digital effects company Wētā FX as part of a company "reset", following an awful year for the game engine provider. Unity also plan to close offices in 14 locations, including Singapore and Berlin, and cut costs at offices in San Francisco and Bellevue, Washington.

First reported by Reuters, the termination of the Wētā FX agreement will take effect on 10th December, and "comes as Unity refocus their efforts on their core business", according to a Wētā FX statement picked up by FXGuide.

Unity acquired part of Wētā Digital, the New Zealand-based digital visual effects and animation company co-founded by Lord of the Rings director Peter Jackson, in December 2021 for $1.625 billion. The deal included tools such as Manuka, Lumberjack and Loki, "a foundational data platform for interoperable 3D art creation", and thousands of VFX assets.

At the time, Unity described the move as a bid "to empower the growing number of game developers, artists, and potentially millions of consumer creators with highly sophisticated content creation tools". As part of the acquisition, the company also took on 275 Wētā Digital engineers.

The remainder of Wētā Digital formed a standalone entity, Wētā FX. Unity subsequently struck a professional services agreement with Wētā FX - the same agreement that will come to an end this December.

Unity have not had a great year, to put it mildly. The company introduced a new pricing structure in September that would see them charging Unity developers per game install given certain conditions, based on install number estimates provided by Unity themselves. Developers were not very keen on this, leading Unity to apologise and tweak their policy, without making a full reversal.

The company revealed "mixed" financial results in their last earnings report in early November, and announced that they expected to lay off staff, with Jim Whitehurst, Unity's interim CEO following the resignation of John Riccitello, commenting that "while we did not expect the introduction of the [new runtime pricing policy] to be easy, the execution created friction with our customers and near-term headwinds". According to Wētā FX, Unity approached them about ending the services agreement on 26th October.

Unity will keep ownership of the tech they bought from Wētā Digital in 2021, following the ending of the deal with Wētā FX, though the technology will also be "fully available" to Wētā FX. Wētā FX are also taking back the Wētā Digital name and trademark, though they'll still call themselves Wētā FX for the moment, and say they're trying to rehire some of the people laid off.

"Unity's need to refocus its efforts on its core business, and change in its relationship with Wētā FX was not something we had planned for," reads the statement from Wētā FX. "We are endeavoring to hire back as many crew as we can, however, there may be a few roles that we may not be able to accommodate within our new structure. Both Unity and Wētā FX will be offering support to those affected."

Elsewhere in the statement, Wētā FX offered their own rationale for the decisions. "Unity believes the Wētā Digital team are remarkable, but Unity needs to become leaner as it focuses its expertise on its core business," the statement explains. "It also believes it makes more sense for Wētā FX to own full end-to-end production activities directly. Unity will be focusing its expertise and people on other matters, and Wētā FX will be getting support for its use of the Wētā Tools directly from its own crew - a shorter path which makes sense for both companies."

What a year it's been. Best of luck to all affected.