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THQ cuts 240 staff as CEO halves salary

Wed 01 Feb 2012 11:04pm GMT / 6:04pm EST / 3:04pm PST
BusinessPublishing

Brian Farrell takes pay cut as company prepares to hand out $8 million in severance pay

Troubled publisher THQ has confirmed it is cutting 240 jobs at the same time that CEO Brian Farrell is to reduce his salary by 50 per cent.

Farrell's salary will drop from $718,500 to $359,250, with the job losses costing THQ $8 million in severance pay. The company will also have to abandon some fixed assets at the cost of $2.5 million and terminate contracts at a cost of $500,000.

The job cuts are across the sales and administrative teams and were initially announced last week although not in any significant detail.

This week Nasdaq warned the publisher that it faces delisting if it cannot raise its share price to $1 per share.

The company has been in the process of reducing headcount, studios and game projects over the past three years as it struggles to transition to a digital business.

13 Comments

Daniel Leaver
Creative Director

23 4 0.2
This is really sad news. I love THQ games and it'd be a real loss if they don't make it through this.

Posted:2 years ago

#1

Tom collins

13 0 0.0
THQ had some good titles under there belt, Where did it all go wrong?

Posted:2 years ago

#2

Liam Farrell

66 13 0.2
U Draw

Posted:2 years ago

#3
Echoes of Midway come to mind, and whilst one has every hope THQ will pull through, looking at the projected numbers - this will cost at least an estimated loss of $11million (a sizable chunk of a annual profit) - one has to wonder how much liquidity is available to allow for fortunes to be turned around for 2012-2013 operating costs/break even

Posted:2 years ago

#4

Alfonso Sexto
Lead Tester

765 574 0.8
Hope THQ will endure. I'm a big fan of their games (Saints Row specially). Also I know what it is for the affected workers since I went through the same back in EA Games.

Posted:2 years ago

#5

Greg Wilcox
Creator, Destroy All Fanboys!

2,130 1,038 0.5
Oops.. spoke too soon in my reply over on the 170 jobs lost post, it seems....

Liam, UDraw wasn't the "wrong" here at all, although it didn't help things much that so much went into bringing it to other platforms after the Wii version (which was OK, but dated and more so by the time it hit the PS3 and 360).

Anyway, yeah, I'm getting a Midway meets 3DO vibe here as well and I expect some IP to be sold off at some point, but I'm not sure if it'll help much in regards to stopping the delisting process...

Posted:2 years ago

#6
What one has to look at is THQs assets. I think it is THQ core ( internal studios, U draw) and THQ partners. Seeing as cuts are required for a mid term survival plan, game development via external partners eg crytek, willrobably undergo no change. This means, internally everything else will undergo a haircut or a giant shave ( for the greater good/ survival)

Posted:2 years ago

#7

Khaled Al-hurby
Director/Writer

16 0 0.0
I concur with Chee’s comment, endurance, understanding and commitment for midterm survival is absolute key with THQ’s studios and partners. It’s either face the realistic cuts or cease to exist as a company. However, there’s clearly something at fault with the senior management at the publisher, for the company to make million dollar development decisions, only to axe development mid-way through, resulting in pay offs and closures which costs even more money… from a observer point of view, that’s abysmal business practise.

That being said, I wish the best to the 240 affected, this is sad news. It seems every month or so, the number of jobs getting cut and the number of jobs created in this industry is out of balance. That’s 240 highly trained talented individuals re-injected back into the industry for employment, from which graduates in the past 3 years have to compete with.

THQ’s extremely attractive IP line up has huge (or in some cases already have) growth potential. Darksiders 2, Saints row, Homefront, Warhammer franchise and the UFC titles are all fantastic ips. Hopefully…. actually, let me correct myself, I know the guys at Crytek will make Homefront an highly ranking metacritic, multimillion dollar generating game that contributes the company’s boost back into growth. Unfortunately for me though, With all these cuts and refocus on the company’s production pipeline, I fear the IP that I love; company of Heroes – a game that plays, looks and competes with titles in 2012 even though it’s a 6 year old game, will most likely get shelved and gather dust for years to come.

Posted:2 years ago

#8

Tim Wright
Managing Director

29 0 0.0
I have respect for THQ taking a chance with uDraw... there's virtually no new IP coming out of the bigger studios these days, and if uDraw had taken off we'd all be saying how clever they were. The truth is you never really know how the public will go with new ideas.

When I designed the MUSICtm / MTV Music Generator range of products we could have fallen flat on our faces too, but we were lucky - people embraced the products. You never know until you try!

I wish them all the best for the future.

Posted:2 years ago

#9

Jim Webb
Executive Editor/Community Director

2,232 2,161 1.0
Tim, uDraw did very well on the Wii selling a couple of million units. It failed on the PS3 and X360 though. Subsequent titles on all platforms had troubles. So it took off but then fell back to Earth.

Posted:2 years ago

#10

Benjamin Kratsch
Freelance Journalist

17 5 0.3
Please correct me if I am wrong: But I always thought that kids games like Spongebob are selling like hell? Or pretty good? And I mean the production cost is low if you compare it to Darksiders 2 or Homefront 2 right? Just talking about a business standpoint. Sure, the license is expensive, but the developing costs not so much.

I think this UDraw Device was really interesting, but I never really got why they designed it. I mean this thing must have cost a ton right? So one million sold is not really a lot.

@Tim Wright: Please don't get me wrong: I really appreciate it that someone in this franchise orientated industry is doing something new. But as a publisher I would take such a risk if I have money to burn. If you are activision, go out and try those toys stuff (which worked). If not, who cares, you just did more than 1 billion with Black Ops (in these times). But THQ always were kinda short on money, right?

Posted:2 years ago

#11

Benjamin Kratsch
Freelance Journalist

17 5 0.3
Another thing:

No offense, I am really just interested in how much marketing you should put in a game.

If we are talking about Homefront. They must have knew that this is a quite good, but not a CoD competing game. Why are you covering whole San Francisco during GDC (basically all cabs were covered) with Homefront? Sure you wanna get a piece of the cake, but as a company I would never spend such a high amount of marketing budget for a completely new IP if I know that I need to sell 2 mio. copies to just break even. Or am I completely wrong?

Would you say from a business perspective it's efficient to put all your money in marketing and just a slice share in the development? Homefront seemed to be really unpolished and not really finished - if you have played it, you know what I am talking about. It had a lot of cool ideas with all those drones and stuff, just didn't play out enough.

Posted:2 years ago

#12

Nic Wechter
Senior Designer

31 64 2.1
I understand Homefront was a profitable product with over 2 million sales despite the bad reviews.

Edited 1 times. Last edit by Nic Wechter on 3rd February 2012 8:52am

Posted:2 years ago

#13

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