Date: 25.10.2024

by Sebastian Warowny

Last update: 25.10.2024 13:49

Evolution CEO Criticizes ‘Unreasonable’ Union Demands Amid Georgian Studio Strikes

Evolution Gaming’s CEO, Martin Carlesund, has addressed the operational challenges faced by the company in Georgia, attributing significant disruptions to “unreasonable” union demands. He also accused union representatives and some media outlets of sabotage activities by spreading “lies and disinformation” exacerbating the situation at the Georgian studio.

Reduced Operations in Georgia

The Georgian studio, previously disrupted by union strikes, is now operating at approximately 60% capacity—a level Evolution aims to maintain.

Martin Carlesund, Evolution Gaming’s CEO, emphasized that while the company supports workers’ rights to unionize, the demands put forth were beyond what the company considers reasonable. The instability caused by the strikes has led to a decision not to return the studio to full capacity in the near future.

Accusations of Misinformation

Carlesund criticized both the unions and certain media outlets for disseminating false information about the scale and nature of the strikes. He clarified that initially, around 300 staff members were involved, causing minimal impact on daily operations.

The situation escalated when “a small number of non-employees and union activists illegally blocked the entrance to the workplace, behaving violently, vandalizing the building, and harassing working staff,” leading to severe disruptions and the relocation of some operations.

Despite the challenges, Carlesund mentioned that meetings with Georgian regulators have been constructive. He stated that regulators “see through the situation with the unions and base their judgments on facts and not social media.” However, he acknowledged that the disruptions have had a negative impact on customers, calling it a “sad outcome” of the ongoing tensions.

Cybersecurity Concerns in Asia Affect Revenue

In addition to labor issues in Georgia, Evolution faced significant cybersecurity threats in Asia during the third quarter. Carlesund noted an extensive increase in cyberattacks, stating that “the impact of these attacks is hard to quantify, but simply put, someone else is selling our product.” Recovery from these attacks is expected to take several quarters as the company works to secure its digital assets.

Looking ahead, Evolution has expanded its footprint in Asia by opening a new studio in the Philippines—a move Carlesund believes could be pivotal for the region’s gaming industry amid evolving regulations. In Europe, the company is optimistic about the French market, with regulatory conditions appearing more stable after years of uncertainty.

Financial Performance in Q3

Despite operational setbacks, Evolution reported robust financial results for the third quarter. Total operating revenues increased by 27.9% year-on-year to €579 million, while net revenue rose by 14.7% to €519.4 million, driven by growth in random number generator (RNG) game offerings.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) also grew by 30.3% to €415.3 million. Carlesund expressed satisfaction with these outcomes, highlighting the company’s resilience and ability to navigate complex challenges.