Unity Software pulls plug on Wētā FX deal, jobs at risk
Wednesday, 29 November 2023
American video game software development company Unity Software has ended its agreement with Peter Jackson’s Wētā FX and 265 jobs have been disestablished as part of a restructure of Unity, although some of the laid off workers may be rehired by Wētā FX.
It’s unclear where all 265 staff are based but it’s understood that most are in Wellington and former Wētā FX workers.
According to an emailed statement from Wētā FX, it and the San Francisco-based Unity Software mutually decided to end Unity’s service agreement with Wētā FX, effective December 10 this year.
That meant 265 Unity workers whose jobs were related to the agreement would be made redundant.
Wētā FX would extend offers to as many of them as possible as it looked to expand its research, development and support functions, the Wētā FX statement said, however there might be a few roles that may not be able to be accommodated.
Unity and Wētā FX were offering support to affected workers, the statement continued.
Unity purchased the technology and engineering division of Wētā FX for NZ$2.3 billion in 2021.
In the deal, Unity obtained the Wētā FX suite of visual effects tools and technology and the latter’s team of 275 engineers, who were to join Unity. The engineering talent helped earn Wētā FX its reputation through films including The Lord of the Rings franchise and Avatar.
Even though staff became Unity employees, they were contracted back to Wētā FX and remained in Wellington.
Wētā FX was still under majority ownership by Jackson, and as of late 2021, it had about 1700 employees.
Ryan Wallace, the corporate communications director of Unity Software, did not immediately respond by email to questions about where the 265 redundant staff were based or how many were former Wētā FX workers.
In response to a question about what was behind the decision to restructure, Wallace referred The Post to a section of Unity’s latest shareholder letter.
The section said Unity was focusing on products most valuable to its customers, and evaluating the right cost structure that aligned with a more focused portfolio. “This will likely include discontinuing certain product offerings, reducing our workforce, and reducing our office footprint,” the letter read.
Wallace continued in the email: “Reuters accurately captured today’s news. Please refer to their story for specifics.”
Further questions went immediately unanswered.
The Wētā FX statement said that Unity would retain ownership of the technology it acquired. The technology would 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.”
Unity ending its deal with Wētā FX is a major 180 from its original ambitions with the latter’s world-leading engineers.
In 2021 Unity’s former president and chief executive John Riccitiello said that it was thrilled to bring in Wētā FX’s engineering talent.
In an interview with Stuff in late 2021, Unity’s then-senior vice president Marc Whitten promised more jobs for Wellington as a result of the deal. He said Unity planned to “significantly grow” its operation.
“We’re super excited about New Zealand and about Wellington. And there’s a couple of reasons why ‒ you know, certainly from a Wētā perspective, it’s become one of the very most important places for movie creation in the world,” Whitten said at the time.
He called the deal a “peanut butter and chocolate” moment: “It was just obvious that together, you know, as a combined entity, we could go a lot faster than we could go [alone].”
Wednesday’s Wētā FX statement said Unity believed it made more sense for Wētā FX to own full end-to-end production activities directly.
Unity’s total global workforce is about 7000 people.