In a not-so-surprising turn of events, Thunderful Group AB, a Swedish conglomerate known for its ownership of various game development studios, has announced a round of layoffs. This decision comes as a result of the company’s realization that their previous spending habits were unsustainable. The layoffs, which will affect around 20 percent of the staff, are part of a larger restructuring program aimed at reducing costs and refocusing efforts on areas with the highest potential for growth and profitability.
According to Thunderful Group AB’s press release, the need for these changes stems from over-investments made in recent years. The company has found itself particularly vulnerable to challenging market conditions that have made their investments unsustainable. To rectify this situation, the new management team and board of directors have identified the need to restructure the group and concentrate their efforts on strategic assets that offer long-term prospects.
Thunderful Group AB aims to achieve annual cost reductions of approximately 90 to 100 million SEK (up to $7.5 million). The company plans to allocate 30 to 40 million SEK (up to $3 million) for the restructuring process, with the impact expected to be visible in the second half of 2024. These figures indicate a commitment to implementing substantial changes and optimizing the company’s financial standing.
The restructuring of Thunderful Group AB follows the appointment of CEO Martin Walfisz, who assumed the role in late 2023. The previous CEO, Brjann Sigurgeirsson, stepped down earlier in the same year after the company experienced net losses in the second quarter and first half of 2022. The change in leadership demonstrates Thunderful’s commitment to addressing their financial struggles and guiding the company towards a more sustainable future.
Thunderful Group AB, formerly known as Thunderful AB, was founded in December 2017 and later merged with Bergsala Holding in December 2019. Since then, the company has acquired various game development studios, including Jumpship, Guru Games, Coatsink, Station Interactive, Headup Games, To The Sky, Stage Clear Studios, and Early Morning Studio. Prior to the layoffs, Thunderful had approximately 480 employees.
CEO Martin Walfisz acknowledged the difficulty of the decisions surrounding the layoffs but emphasized that they were necessary for the viability and strengthening of the group. Walfisz expressed his conviction that these changes would ultimately position Thunderful as a stronger player in the market. The company’s focus on future growth and profitability underscores their commitment to sustainable practices and responsible corporate management.
The admission of having “over-invested” aligns Thunderful with other major industry players who faced similar challenges in 2023. Companies like Epic and Twitch have openly acknowledged their optimistic planning during the stay-at-home lockdown restrictions, which created an artificial boom period. Surprisingly, few executives have faced substantial repercussions for these missteps. Thunderful’s layoffs, though significant, pale in comparison to the restructuring efforts of fellow Swedish conglomerate Embracer, who laid off over 900 employees last summer.
Thunderful Group AB’s restructuring serves as a reminder of the importance of prudent financial management in the gaming industry. It demonstrates the consequences of unsustainable spending and emphasizes the need for companies to reevaluate their strategies, refocus on profitable assets, and prioritize long-term growth. Despite the challenges faced, Thunderful Group AB remains optimistic about the future and strives to emerge as a stronger player in the market.
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