Unity Technologies Shuts Down Weta Digital And Lays Off 265 Employees In ‘Company Reset’

Unity Technologies has shuttered Weta Digital to refocus on game development after acquiring part of the VFX studio back in December 2021. In line with the studio’s closure, Unity has also ended its services agreement with Weta FX and laid off 265 employees which equates to 3.8% of its total workforce. That’s on top of the 8% that were given their pink slips back in May and the 4% that were let go in July 2022.

Prior to the acquisition, Weta Digital was wholly owned by The Lord of the Rings and Hobbit film trilogy director and producer Peter Jackson. He now heads the remainder of the company which has since been rebranded as Weta FX.

The $1.62 billion acquisition deal granted Unity Technologies full ownership of the VFX studio’s full suite of tools, tech, and talent with the condition that Weta FX will be allowed to use Weta Digital’s services for their own projects.

Unity will retain ownership of the said tools but will no longer be offering professional services going forward. Weta FX, however, will still have unrestricted access to the tools, it’ll just have to supply the manpower to use them. The studio is also looking to re-hire as many of the affected employees as it can.

“[…] It makes more sense for Weta FX to own full end-to-end production activities directly,” Unity Technologies explained. “Unity will be focusing its expertise and people on other matters, and Weta FX will be getting support for its use of the Weta Tools directly from its own crew--a shorter path which makes sense for both companies.”

Weta Digital’s closure is part of Unity’s plans to “reset” the company and make it “leaner” with a renewed focus on its core business of game development. The company also plans to reduce its spending by shutting down 14 of its offices across the globe and encouraging its employees to work from home.

2023 has been an extremely challenging year financially not only for Unity but for the video game industry in general. Unity’s financial woes, however, were further compounded when it sneakily introduced per-install runtime fees earlier this year. The move earned them the ire of the entire developer community, causing its stock prices to plummet and then-CEO John Riccitiello's retirement in the face of the controversy.