Unity Software Inc (U)

Unity Software Inc (U) stock dropped by 7.98% due to the company's announcement of a substantial reduction in its workforce. Here's a breakdown of the key events and factors contributing to this decline:

• Workforce Reduction Plans: Unity Software intends to cut approximately 25% of its workforce, which translates to about 1,800 jobs. This decision was disclosed through a regulatory filing and an internal memo issued by the company. It marks the largest layoff in the history of the San Francisco-based company.
• Company Reset; The decision to reduce the workforce aligns with Unity's "company reset" initiative that was introduced by interim CEO Jim Whitehurst in November. This initiative aims to streamline the company's operations and focus on its core business to enhance long-term success and profitability.
• Past Challenges and Layoffs: Unity has faced challenges, including a controversy over a new pricing policy that led to developer backlash and a drop in its stock price. Following this, the company underwent leadership changes, with Jim Whitehurst taking over as interim CEO and president. These layoffs represent the fourth round of job cuts since July 2022.

Unity Software (U) shares fell by 7.90% to $33.45 on Monday due to a controversy over proposed developer fees, which triggered backlash from developers considering alternatives. Unity's attempt to change its fee policy, while promising adjustments, raised uncertainties about its revenue and customer retention, casting doubt on its pricing power and growth prospects.

https://www.fool.com/investing/2023/09/18/why-unity-software-plunged-on-monday/

The company's performance is being negatively affected by a decline in mobile gaming and advertising demand. As a result, the company has made the decision to cut 600 jobs, which accounts for 8% of its workforce. Additionally, the company plans to reduce its global office locations by approximately 35%.

https://www.tipranks.com/news/unity-software-nyseu-gained-on-solid-q1-results