SteamWorld owners Thunderful to fire 20% of staff due to "over-investments made in the last few years"

A round of videogame company layoffs following a period of "unsustainable" spending? It must be a Wednesday. Swedish conglomerate Thunderful Group AB - whose corporate possessions include Somerville developer Jumpship and several teams working on the SteamWorld games - have announced that they will lay off around 20 percent of their staff as part of a restructuring program that "stems primarily from over-investments made in the last few years".

"The program aims at lowering costs and increasing focus on areas with the best future growth and profitability prospects," reads a press release (via Game Developer). "Actions will include both significant staff reductions and evaluation of divestment of non-strategic assets.

"The need for Thunderful to enact these changes stems primarily from over-investments made in the last few years," it continues. "These investments have proven unsustainable given the current industry climate, which has resulted in the Group being particularly affected by challenging market conditions. The new management team and the board of directors have identified the need to restructure the Group and focus its efforts on the strategic assets with the best long-term prospects."

Thunderful's bosses are hoping to make annual cost reductions of between 90 million to 100 million SEK (up to $7.5 million). The company will spend 30 to 40 million SEK (up to $3 million) on the restructuring, and expect the impact to become apparent in the second half of 2024.

There's some accompanying comment from CEO Martin Walfisz, who assumed the role late last year. Thunderful's last non-acting CEO, Brjann Sigurgeirsson, stepped down in August 2022 to focus on game development after the group posted a net loss of SEK 21.8 million ($2.1 million) for the second quarter of 2022, and a net loss of SEK 20.7 million ($2 million) for the first half of the year.

Thunderful Group AB began life as Thunderful AB, founded in December 2017, which merged with Bergsala Holding in December 2019. In the years since, the company have acquired Guru Games (Magnetic: Case Closed), Coatsink (Astronimo), Station Interactive (SteamWorld Build), Headup Games (Bridge Constructor), new indie To The Sky, Stage Clear Studios (The Last Kids On Earth And The Staff Of Doom), Early Morning Studio (Vampire's Fall: Origins), and finally Jumpship in November 2022. Following Jumpship's acquisition, Thunderful had around 480 people on the books.

"To ensure and strengthen the viability of the Group, we have found no alternative other than to reduce costs and focus the business on areas with the best future growth and profitability prospects," Walfisz said of today's layoff announcements. "It has been difficult to make these decisions, and it saddens me that we will have to say goodbye to many skilled colleagues and partners. Nevertheless, I am convinced that this is a necessary direction for Thunderful and that these changes will make the company a stronger player in the market."

Should you wish to hear more, Thunderful will hold a live webcast later today (January 17, 2024), at 3.30pm CET and 2.30pm UK. Here's the link.

The admission that Thunderful have "over-invested" continues a theme for big industry players during 2023, with the likes of Epic and most recently Twitch commenting that they had been optimistic in their planning during an artificial boom period created by stay-at-home lockdown restrictions, though few of the executives concerned appear to have faced any real material repercussions for their mistakes. While severe, Thunderfall's headcount reductions pale in comparison to those of fellow Swedish conglomerate Embracer, who are still restructuring after laying off over 900 people last summer.

Best of luck to everybody affected.