UPDATE: Scroll down for a statement from WētāFX:
Reuters is reporting that Unity Software (U.N) will eliminate 265 jobs or 3.8% of its global workforce and end an agreement with a digital video effects company founded by the “Lord of the Rings” director as part of a “reset”. This comes as a harsh blow for employees, coming as it does right before Christmas.
It was just in Dec ’21 that Unity completed its acquisition of Weta Digital’s tools, pipeline, technology, and engineering talent. This acquisition was said to be “designed to empower the growing number of game developers, artists, and potentially millions of consumer creators with highly sophisticated content creation tools.” As part of that deal Unity ‘welcomed’ Weta Digital’s world-class engineering talent of 275 engineers who are known internationally for their architecting, building, and maintaining of Weta Digital tools and core pipeline. At the same time, Weta Digital’s Academy Award-Winning VFX teams moved into a standalone entity known as Wētā FX under majority ownership by Sir Peter Jackson and helmed by CEO Prem Akkaraju. At that time they issued a statement saying: “under the terms of the agreement, Unity acquired Weta Digital’s tools, pipeline, technology, and engineering talent for US$1.625B in a combination of cash and stock.” Their press release continued stating, “Unity will not be relocating employees with this acquisition and remains supportive and committed to Wellington, New Zealand.”
This week’s announcement includes the termination of the professional services piece of an agreement Unity struck with Wētā FX in 2021 after the purchase of the technology and engineering division. As a result, 265 employees whose jobs are related to the agreement will be laid off, the company said. Employees have only about a week to wrap up before their positions are terminated finally.
John Riccitiello retired as President, Chief Executive Officer, Chairman, and a member of the Company’s Board of Directors, at the start of October. James M. Whitehurst was appointed Interim Chief Executive Officer, President, and a member of the Board. Roelof Botha, Lead Independent Director of the Unity Board, was appointed Chairman.
When the deal happened it was seen by some as a reaction to the massive investment of time and energy that Epic Games had made into the M&E space and that in one move Unity would establish itself as a major player in the professional M&E market. As recently as August at SIGGRAPH in LA, Unity had major marketing efforts behind promoting the tech and tools Unity had acquired. At the conference they launched their new ‘Unity Wētā Tools’ division, which was said to have been set up to “deliver the most widely used and trusted solutions for artists to collaborate and create 2D and 3D content, will showcase the latest advancements, designed to make high-end VFX production and premium content creation accessible to creators.” At that time, Allan Poore, SVP of Unity Wētā Tools stated that “Unity is investing significantly in research and development, supporting ongoing innovation, and driving the future of content creation.”
In the Weta transaction, Unity acquired:
- Weta’s world-class engineering talent of engineers.
- Dozens of industry-leading tools such as Manuka, Gazebo, Barbershop, Lumberjack, Loki, Squid, Koru, and more, all integrated seamlessly into Weta’s production pipeline;
- A foundational data platform for interoperable 3D art creation, making it easy for hundreds of artists to work seamlessly together; and
- A library of thousands of incredible assets that the WetaFX team will continue to accumulate as they create VFX in the years ahead.
- For a more compete list of the tools acquired see our fxguide story
UPDATE Statement from WētāFX
On November 25, 2023, Unity and Wētā FX mutually agreed to terminate Unity’s service agreement with Wētā FX effective December 10, 2023. This decision comes as Unity refocus their efforts on their core business. The termination of the agreement will see the reduction of 265 Unity roles. Wētā FX will be extending offers to as many of the team as possible as it looks to expand its research, development and support functions. Unity will retain ownership of the technology it acquired from Wētā in December 2021 and will be evaluating the best way to enhance its offerings with it over time. The technology will also remain fully available to Wētā FX. Wētā FX will continue to build and extend the IP, and develop its own tools and techniques, to continue its evolution as a leader in visual effects.
What does this mean for Wētā Tools?
Unity will continue to own the technology it acquired and will evaluate the best way to enhance its offerings over time.
Wētā Tools will remain fully available to Wētā FX. Wētā FX will have the right to build and extend the IP, and develop its own tools and techniques to continue its evolution as a leading innovator and creator in the visual effects industry.
How will it work in terms of integrating the teams back into Wētā?
We are looking to extend offers to as many of the Wētā Digital crew as we can. Joe Letteri and Kimball Thurston will continue to lead Wētā’s technology vision and roadmap. The roadmap and planning we have asked the team to work on so far does not change with this decision. We will continue to evolve the studio to enable our artists to be more efficient, unlocking their creative potential, and preparing us to continue to provide the best visual and studio experience.
Is Wētā FX hiring back everyone?
Unity’s need to refocus its efforts on its core business, and change in its relationship with Wētā FX was not something we had planned for. We are endeavoring to hire back as many crew as we can, however, there may be a few roles that we may not be able to accommodate within our new structure. Both Unity and Wētā FX will be offering support to those affected.
When was this decision made?
Unity initially approached Wētā FX on 26 October, 2023. Unity and Wētā FX reached agreement on 25 November, 2023.
Why was this decision made?
Unity believes the Wētā Digital team are remarkable, but Unity needs to become leaner as it focuses its expertise on its core business. It also believes it makes more sense for Wētā FX to own full end-to-end production activities directly. Unity will be focusing its expertise and people on other matters, and Wētā FX will be getting support for its use of the Wētā Tools directly from its own crew – a shorter path which makes sense for both companies.
What’s happening to the Wētā Digital name?
The Wētā Digital name and trademark will be coming back to Wētā FX however there is no plan to change Wētā FX’s name.
STATEMENT ENDS.
Unity’s Share Price.
It is worth noting that there is no indication or even hint that the actual Unity Wētā Tools’ division engineers and staff were at any fault whatsoever. This seems to be a reaction to Unity’s share price and the company’s new overall direction. When the deal was done the share price was north of $150, peaking near $200 but today it is less than $30 a share.
In addition, Unity will shut down offices in 14 locations such as Berlin and Singapore, pending employee consultation in some countries, and significantly reduce its office footprint for the remaining offices, including in San Francisco and Bellevue, Washington.