Ellie Gibson
11:16 (BST)
20/12/2005
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SEC filing confirms job cuts at Midway
Publisher to make up to 11 per cent of global workforce redundant
Midway has placed a filing with the SEC which confirms that the publisher and developer plans to introduce a series of job cuts which will reduce its global workforce by as much as 11 per cent.
The filing states that the company's board of directors last week "committed to a plan to reduce the company's cost structure and increase product development synergy and efficiency."
"To that end the company has instituted strategic workforce reductions that it expects will allow the company to better leverage resources in a manner consistent with its strategy to increase the quality and size of its internal product development capabilities."
As a result, "between 71 and 96" members of staff, or 8-11 per cent of the workforce, will be made redundant. Midway said that the majority of redunancy notices will be issued before the end of 2005, with the remainder following next year.
But despite these reductions, Midway said, "The company grew its overall internal product development employee base in 2005 and intends to continue to grow its product development employee base in 2006."
Rumours of job cuts emerged last week after Midway Australia, formerly Ratbag Studios, was shut down just four months after the publisher completed acquisition. It's estimated that around 70 people have been left jobless as a result.
Midway now expects to incur pre-tax charges of USD 13 million as a result of the job cuts. The company also faces additional non-cash charges of around USD 7 million for Q4 2005, attributed to inventory writedowns, bad debts and development amortisation. The USD 95 million loss predicted in Midway's financial year forecast is likely to increase as a result.
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