MX vs. ATV studio Rainbow Studios affected by Embracer layoffs

Embracer Group’s ongoing restructuring efforts have apparently resulted in layoffs MX vs ATV Legends Developer Rainbow Studios.

Linked posts from several former Rainbow employees suggest that the Phoenix-based studio has been downsized as Embracer attempts to steady the ship after officially declaring the M&A era over.

Back in June, the big-spending Swedish conglomerate announced it would make an unknown number of layoffs, close studios and scrap a number of projects in a bid to become a “high cash flow company.”

It appears that a number of Rainbow Studios employees from various areas were affected by this decision. Former Rainbow QA analyst Austin Herrington wrote on Linkedin that the studio was “affected by the restructuring of Embracer Group,” which led to his firing.

“This is a deeply sad moment for the industry and for me personally as I leave a studio I love,” they wrote. “Although I had hoped to stay at Rainbow for much longer, I am proud of the studio and everything we have achieved. Nobody wanted this to happen and I can’t say enough about how well we were treated on the way out.”

Other posts confirmed the news, with former Rainbow technical lead Thomas Tobin, artist Molly Cuddihy and level designer Zac Bogner all stating that they had been fired from Embracer.

During a question-and-answer session with investors in August, Embracer CEO Lars Wingefors confirmed that studio closures and layoffs were ongoing and said the company was taking action behind closed doors to achieve a net debt target of $8 by the end of the fiscal year Billion SEK to reach year.

As a result, studios like Campfire Cabal and Volition have already closed, while there have also been reports of layoffs at Gearbox Publishing.

When discussing the company’s roadmap during this question-and-answer session, Wingefors said Embracer needs to reduce capital expenditures and prioritize within its portfolio before pursuing “more targeted investments in our highest ROI titles” to achieve growth and profitability to advance.

Game Developer has reached out to Embracer for more information on the layoffs and the future of Rainbow Studios.

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