Ouch! Embracer Group is in the middle of a restructuring transition that has it divesting several video game studios, leading to layoffs and game cancelations. Less than two weeks ago, the holding company shut down Saints Row developer Volition to cut operating costs. Now, it has put another well-known game developer on the action block.

Embracer Group is looking to rid itself of one of its more valuable studios, Gearbox. Reuters notes that it may already have several interested buyers. While the company has not named names, Goldman Sachs and Aream investment banks are assisting in negotiations.

Embracer stock jumped five percent to close at 27.40 Swedish krona (SEK) following the news on Monday. The modest gain is dwarfed by the meteoric plunge from SEK 52.40 to SEK 20.99 in May. The sharp dip is credited to a $2 billion (US) investment from Saudi Arabia's Savvy Games Group that evaporated. Embracer needed the cash injection to recoup funds used on a studio spending spree spanning 2021 and 2022.

Embracer picked up Gearbox in February 2021, along with Aspyr, Easybrain, and Springboard VR, for around $1.4 billion. It bought out another 18 studios, including 3D Realms, between May and October 2021. Then, in December, it snapped up three holding companies consisting of 31 studios plus four independent developers, including Perfect World Entertainment, for over $3 billion.

In 2022, the company continued doling out money for numerous studios and IPs. By April, it had added six more developers to its stable. Then, in May 2022, it attended a Square Enix garage sale where it purchased Cyrstal Dynamics, Eidos-Montreal, and Square Enix Montreal to the tune of $300 million.

By this point, Embracer was already feeling the burned hole in its wallet and entered talks with Savvy Games to bail it out for $1 billion. Savvy was receptive to the deal, and Embracer continued buying studios throughout 2022. Eventually, it tried getting Savvy to double its investment, at which point the Saudi firm backed out. To put the financial woes into perspective, consider that Embracer shares were selling for SEK 130 before it went shopping – a 79-percent tumble.

Now, the company is struggling to keep the lights on and has initiated a restructuring plan that it hopes will get it back to – or at least close to – operating in the black. Of course, as with any restructuring, there are casualties. Lost jobs and indefinitely postponed or canceled projects are just a few sacrifices. Volition is entirely gone now in Embracer's liquidation.

Selling Gearbox could potentially take a big chunk out of Embracer's debt. The company wants to divest and cost-cut enough to pay off $605 million by the end of its 2023 fiscal year. It will still have a long road ahead, though. Its current outstanding debt is over $1.5 billion.