Forget the euphemistic term “belt-tightening.” News yesterday of layoffs at Unity and Niantic, affecting around 4% and 8% of their respective workforces, has demonstrated starkly how the present economic downturn is making things tougher for companies building toward the metaverse and resulting in real pain for employees. The recent turmoil and slowdown at Meta Platforms of course should have been a warning sign.

Unity, which saw its stock pummeled last month after a disappointing earnings result for its ads business, has laid off hundreds. (Unity had 5,245 employees at Dec. 31, to put those numbers in context). Gaming publication Kotaku reported that the layoffs hit almost every part of the company, though the AI and engineering teams were allegedly affected more. 

“As part of a continued planning process where we regularly assess our resourcing levels against our company priorities, we decided to realign some of our resources to better drive focus and support our long-term growth,” a Unity spokesperson told Reality Check. I’m sure Unity does indeed assess these things regularly, but the careful language of this statement ultimately does little to address how Unity got out over its skis on staffing.