A screenshot from Assassin’s Creed Shadows (2024), Ubisoft

At least one analyst speculates that Ubisoft might cut its staff by 40% amid rumors that the company will be bought out and taken private.

A screenshot from Assassin’s Creed Shadows (2024), Ubisoft

A rumor from Bloomberg’s Vinicy Chan, Dong Cao, and Benoit Berthelot claims that Tencent Holdings Ltd. and the Guillemot family “are considering options including a potential buyout of the French video game developer after it lost more than half its market value this year, according to people familiar with the matter.”

The reported added, “The Chinese tech company and Guillemot Brothers Ltd. have been speaking with advisers to help explore ways to stabilize Ubisoft and bolster its value, the people said, asked not to be identified discussing a private matter. One of the possibilities being discussed would involve teaming up to take the company private, according to the people.”

A screenshot from Star Wars Outlaws (2024), Ubisoft

This rumor comes in the wake of investment firm AJ Holdings calling for Ubisoft to be sold and taken private. In an open letter addressed to the Ubisoft board, CEO Yves Guillemot, Tencent, and the Guilemot Family Holding in the middle of September the company stated, “Take the Company Private for fair price: We urge the Board to consider taking Ubisoft private, with Tencent as a significant partner and shareholder. Ubisoft as a public company is under ongoing scrutiny to report better and better quarterly results to please investors which may harm strategy going forward and is harming Ubisoft at this time, when they need to think long-term to get new air into their exceptional franchises.”

Furthermore, it noted, “If Guillemot and Tencent are not interested in Ubisoft value, we urge the current management not to block any takeover as there are several PE groups that would be interested, based on our research. In the event of offer from a PE group or strategic investor, we urge Guillemot family to accept this bid, when this bid will be for fair price, if this offer won’t be accepted we will sue for a reimbursement of damages.”

A screenshot from XDefiant (2024), Ubisoft

The investment firm made this call after it accused the Guillemot family Tencent of “discounting potential value of Ubisoft in order to buy more shares at lower valuation and eventually take full control of the company at heavily discounted valuation.”

It specifically stated, “In our view, recent delays of certain titles there are creating uncertainty amongst investors is beneficial for Guillemot and Tencent in order to acquire more shares at even discounted valuation as Ubisoft is currently trading close to 15 EUR per share lowest point since 2015, giving Ubisoft valuation less than 2 billion EUR. Guillemot brothers who are respected entrepreneurs in France best know the value of Ubisoft and its distribution agreements they have with Tencent and Activision Blizzard, so we assume they may use this as tactic to get minority shareholders under the stress.

A screenshot from Avatar: Frontiers of Pandora (2023), Massive Entertainment

The firm followed up on this with Reuters reporting that it had “gathered support from 10% of the French videogame publisher’s shareholders.”

It also reiterated its call for Ubisoft to sell and take it private, “We call on the management of Ubisoft to allow the sale of the company to third parties or private equity firms at a fair price.”

A screenshot from Assassin’s Creed Shadows (2024), Ubisoft

Following this rumor about Tencent and the Guillemot family taking the company private, Insider Gaming’s Tom Henderson speculated that Ubisoft would be forced to reduce its staff by “about 30-40%.”

Tom Henderson on X

Ubisoft’s website notes it has 20,000 employees that work in 45+ studios across 30 countries. If the company were to lay off 30% of its workforce, it would be laying off 6,000 employees. If it were to layoff 40% of its workforce, it would be laying off 8,000 employees.

A screenshot of Ubisoft.com

What do you make of this speculation that Ubisoft might cut around 40% of its staff?