Unity Gaming Company Announces Mass Layoff of 1,800 In San Francisco

Unity, a San Francisco video game company specializing in game engines, let go 1,800 employees on Monday, becoming the Bay Area’s first major mass layoff a little more than a week into 2024.

In the last few years, San Francisco and the surrounding Bay Area have seen an extraordinarily large number of mass layoffs. Since October 2022, over 100,000 jobs, primarily in the tech sector, have been lost. This has included thousands of jobs at Twitter being lost following it’s acquisition by Elon Musk in late 2022, Salesforce having so many rounds of firings that they had to give up an entire office building, 12,000 at Google, and 10,000 at Meta, which owns Facebook. Even normally strong Bay Area companies like Apple saw substantial cuts.

However, in the second half of 2023, things generally slowed down, with companies mostly easing on further firings. Only companies that saw unusual amounts of turmoil, such as Cruise, who let go over 900 employees last month because of internal issues at the company rather than the usual reasons surrounding the decline of tech, reconfiguring in a post-COVID world, and safety concerns of the Bay Area. Mass layoffs in the thousands such as those seen last year had not been predicted to occur nearly as much in the Bay Area in 2024, with hiring in some areas, specifically in AI companies, actually expected to increase.

Despite the outlook, the first week of the new year has been rough. Some San Francisco based start-up companies already did layoffs only days into 2024, with Unity being the first to have a major layoff occur. According to the SEC filing on Monday, Unity plans to lay off 1,800 employees. The cuts, first hinted at by the company late last year, will comprise of approximately 25% of their current workforce. Multiple reasons were given for the layoffs, including the company growing too big and needing to be leaner heading into 2024.

“We are currently doing too much, we are not achieving the synergies that exist across our portfolio, and we are not executing to our full potential,” said company CEO Jim Whitehurst in a statement before the layoffs.

Tech experts told the Globe on Monday that, while discouraging, the number of large layoffs in the area will still likely to be down from the levels they were at in 2022 and 2023.

“By now, most companies have gotten past all the COVID shuffling around and have figured out where they stand at office and at-home work,” said Julie Ochs, a San Jose-based headhunter and hiring specialist, to the Globe on Monday. “As Unity showed, there are still companies working things out financially. But this shouldn’t be taken as an indicator for the rest of the year. There will undoubtedly be some more big ones, but we are also seeing a hiring bloom too. It sounds weird, but San Francisco is bouncing back at the same time it continues to fall.

“Yes, AI growth is helping, but so are companies expanding out into other areas too. And yes, office space issues will remain a concern in San Francisco for quite some time, but on the flip side, we now have many companies saving money on office space so they don’t need to have layoffs either. Cut overhead there now, you don’t need to layoff down the road.

“San Francisco will likely start recovering later this year too. This is a somewhat optimistic view, but we are having companies come back from sojourns in Miami back to the Bay Area too. It’s only encouraging. Unity was bad, but we won’t see many of these later in the year most likely. At the same time, take it with a grain of salt too, as this is San Francisco and you don’t know what will happen.”

Other companies are to report on their financial health in the coming months.