Videogame software provider Unity Software will eliminate 265 jobs or 3.8% of its global workforce and end an agreement with a digital video effects company founded by the "Lord of the Rings" director as part of a "reset," the company said on Tuesday. The move follows a tumultuous period for the San Francisco-based company, which makes a software toolkit used by many videogame developers including the maker of the popular "Pokemon Go" mobile game. In October, Unity CEO John Riccitiello retired,

By Anna Tong

SAN FRANCISCO (Reuters) - Videogame software provider Unity Software will eliminate 265 jobs or 3.8% of its global workforce and end an agreement with a digital video effects company founded by the “Lord of the Rings” director as part of a “reset,” the company said on Tuesday.

The move follows a tumultuous period for the San Francisco-based company, which makes a software toolkit used by many videogame developers including the maker of the popular “Pokemon Go” mobile game.

In September, the company tried to impose a new “runtime fee” pricing policy, which charged new fees to its game developers if certain revenue and install thresholds were met. Following a developer revolt and a steep dropoff in share price, the company revamped the new fees.

In October, Unity CEO John Riccitiello retired, and the company appointed former IBM president Jim Whitehurst as interim CEO and president and Sequoia Capital partner Roelof Botha as board chairman.

Tuesday’s announcement includes termination of the professional services piece of an agreement Unity struck with movie director Peter Jackson’s visual effects company Weta FX in 2021 after Unity purchased the technology and engineering division of Weta FX. As a result, 265 employees whose jobs are related to the agreement will be laid off, the company said.

The company has said its total workforce was around 7,000.

In addition, Unity will shut down offices in 14 locations such as Berlin and Singapore, pending employee consultation in some countries, and significantly reduce its office footprint for the remaining offices, including in San Francisco and Bellevue, Washington.

Unity will no longer mandate that employees work from offices three a days a week and will reduce “full in-office services” to three days a week in most locations, the company said.

More changes are in store to “refocus” Unity’s business, Whitehurst told Reuters. “While no additions have been finalized, it’s clear that we will reduce the number of things we are doing overall,” he said.

(Reporting by Anna Tong in San Francisco; Editing by Matthew Lewis)