Matt Martin 08:11 (BST)
17/12/2008

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Struggling publisher Midway Games is taking further measures to reduce costs by axing 25 per cent of staff, cancelling projects in development and closing its studio in Austin.

Redundancies will take effect across San Diego, Austin and Chicago locations, and the projects canned were all scheduled for release in 2010 and 2011, and had not been made public.

"The cost-reduction measures are vital for us to rationalise our operations and provide the resources necessary for our core properties to succeed," commented Matt Booty, president and CEO of Midway.

"These initiatives, along with the other steps we have taken this year, are a response to the specific challenges we are facing at Midway, many of which have been amplified by the current economic conditions."

The publisher is in danger of defaulting on its debts of USD 240 million, and faces a possible delisting on the stock exchange.

Sumner Redstone sold his controlling stake in the Mortal Kombat publisher at the start of the month for USD 100,000 (EUR 79,241 / GBP 66,718), prompting share prices to tank 40 per cent, to a low of 23 cents.

Approximately 180 staff are affected by the latest round of redundancies, in product development, QA, marketing and PR, accounts, sales, submissions and IT.

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