Unity Software will cut 25 percent of its workforce

Video game software provider Unity Software said Monday it would cut its workforce by 25 percent, or about 1,800 jobs, in one of the first major layoffs in the tech sector this year.

In an effects submitUnity said the cuts would allow the company to restructure and refocus “on its core businesses, and position itself for long-term profitable growth.” The company added in a statement that teams across the company would be affected.

Last week, printer maker Xerox said it would lay off 15 percent of its 23,000 employees worldwide in the first quarter of 2024, an effort to further shift its business toward services and away from its iconic photocopiers.

The cuts signal what could be the start of another tough year for the tech industry, which laid off tens of thousands of workers last year in the wake of challenging economic conditions and overly rosy forecasts for business growth. While many tech companies have said the worst is now behind them, few have managed to regain the pre-pandemic sales momentum that pushed them to hire more in the first place.

Unity has cut jobs before, including 265 in November after interim CEO James Whitehurst announced a business reset during an earnings call.

The company said in its statement that the “decision was not made lightly” and that it was committed to helping affected employees.

The San Francisco-based company’s software is the basis for the video games of more than two million developers.

Last fall, the company faced major backlash from thousands of game developers around the world due to a change in its pricing structure. The new fee structure, which was intended to finally make the company profitable, would have charged developers who relied on the software more as their games became more popular.

In October, Unity’s former CEO John Riccitiello, a strong supporter of the price change, stepped down after nine years with the company. The company has scaled back a number of changes after the complaints.