Nascar Rivals developer Motorsport Games is laying off around 40 percent of its workforce to reduce its year-over-year operating expenses.
The studio, which is headquartered in Miami, confirmed the news in an SEC filing and said it will be cutting around 38 jobs primarily in the United Kingdom and Australia.
Motorsport said the restructuring program will incur a charge of around $400,000 to $500,000, largely consisting of severance and redundancy costs. The studio expects to pay out the majority of that restructuring charge during the fourth quarter of the current fiscal year.
“The Company further anticipates the implementation of the workforce reduction, including cash payments, will be substantially complete by the end of the fourth quarter of fiscal year 2023,” it added. “The workforce reduction is subject to legal requirements in Australia and the United Kingdom, which may extend this process beyond the fourth quarter of fiscal year 2023 in certain cases.”
Motorsport’s financial issues
Motorsport’s latest fiscal report shows the studio is struggling to balance its books. During the six months ended June 30, 2023, the company recorded a net loss of approximately $13.5 million, including negative cash flows from operations totaling around $8.9 million.
At the time, Motorsport said it was “actively exploring several options” in a bid to remedy the situation, including equity financing, the sale of licensing or company assets, and cost reduction and restructuring initiatives. It also warned that it had re-evaluated its product roadmap and would be putting the release of any future NASCAR titles “on hold indefinitely.”
“Further, the Company is evaluating its ability to deliver new titles under its other licenses, such as with INDYCAR and the British Touring Car Championship (the “BTCC”), which may result in further adjustments to the Company’s product roadmap,” added the company in its last fiscal report, suggesting it might also pause production on other racing titles.
Motorsport is the latest in a forever-growing list of studios to have made layoffs in 2023. Major companies across the industry including Meta, Embracer Group, Epic, Unity, Bungie, Media Molecule, Ubisoft, Creative Assembly, and many, many more all cutting jobs.
According to VideoGameLayoffs, which has been tracking the spate of job losses across the game industry, an estimated 6,500 people have lost their jobs in 2023 alone.