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Tomb Raider and Perfect Dark Projects are safe for now. Embracer Group currently employs over 17,000 employees. Their Stocks dropped by 40% following the failure of this mysterious $2B deal.

Swedish gaming conglomerate Embracer Group, which has been rapidly gobbling up game studios and popular IP over the past few years, will undergo a major restructuring that will require the publisher to close multiple studios and cancel several games. The news comes weeks after it reported that a deal worth $2 billion in income to the company had unexpectedly fallen through.

CEO Lars Wingefors announced the restructuring in an open letter alongside an investor webcast and a news release on Tuesday morning. He said the restructure is split into three phases and is expected to continue until March 2024. The nature of these phases is unclear, and under the general guise of cost savings and consolidation to reduce debt below 10 billion Swedish Krona, which equals roughly $930 million

Matthew Karch, the now former Saber Interactive CEO and current interim chief operating officer, said, however, that the first phase of cost-saving will be “immediate and noticeable.” This means that an unknown number of Embracer Group’s 17,000 staff will be laid off as part of the process. Neither Wingefors nor Embracer Group has detailed when specific closures or layoffs will happen. Polygon has reached out to the publisher for more information.

“Embracer currently engages close to 17,000 people and while that number will be lower by the end of the year, it is too early to give an exact forecast on this,” Wingefors said in the letter. Karch said the studios to be closed are “underperforming,” or not creating games “up to our standard.” Embracer Group said that the impacted projects have “not yet been announced” and have “low projected returns” on investment.

Embracer Group owns the rights to both Tomb Raider and Lord of the Rings; it acquired Tomb Raider when it purchased Eidos, Crystal Dynamics, and Square Enix Montreal from Square Enix in 2022. That year, Embracer Group bought the licensing rights to The Lord of the Rings and The Hobbit by buying rights holder Middle-earth Enterprises. Early this year, Embracer announced that it has five mystery Lord of the Rings games in development by external partners.

(Source: Polygon)

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