Jim Whitehurst, the recently named interim chief executive of Unity Software, has a brief window of time to restore trust between the troubled gaming development company, its investors and developers. And he knows it.
In a brief Zoom call with analysts after Unity’s
disappointing third-quarter results Wednesday — in which the company offered no guidance for the fourth quarter — Whitehurst and Chief Financial Officer Luis Visoso said they are “examining the company from top to bottom.” The call was Whitehurst’s first since Unity’s pricing fiasco in September, which angered its developer customers and led to the departure of its controversial CEO, John Riccitellio. Whitehurst and Visoso plan to restructure the company, cutting jobs, products and office locations. Unity stock fell almost 12% in after-hours trading Thursday, and its share price has been roughly cut in half since hitting a 52-week high in July. “I mean, this is a ‘rip off the Band-Aid’ reset, and then we’re going,” said Whitehurst, who is also the former CEO of Linux developer Red Hat, owned by IBM Corp.
He said Unity was not giving an outlook for the fourth quarter because the executives did not want to be constrained from making tough decisions by a previous guidance. “I want to emphasize we’ve got to move fast, and we’ve got to be decisive,” Whitehurst said. He added that he hopes to be sandbagging by saying they will be done by the end of the first quarter: “I’m hoping we can do it a lot faster than that.” But the problem facing Unity at this pivotal moment is that the needs of investors and its developer customers are not necessarily aligned. Wall Street wants revenue growth and profits, while game developers want cutting-edge software to help them build and advertise their games at the lowest price. Even though Unity did an about-face on some of its fee hikes, the damage was done, and some developers are still furious with the company. Whitehurst described a conversation with an unnamed developer, who initially started out saying he wanted nothing more to do with Unity. “It started off very, very negative — but as soon as we started getting into some of the fea …