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Square lowers profit forecasts 65% following layoffs

Premium severance costs blamed for expected loss

Square Enix has issued a revision to its 2010 fiscal year financial forecast, lowering its estimated first-half profit by 65 per cent to JPY 2.6 billion (USD 28.4 million).

The company blamed a number of "special factors" for the forecast revision, including an unfavourable exchange rate and the cost of premium severance packages for staff laid off.

Net income for the full year, ending March 31, 2010, was lowered 33 per cent, from JPY 15 billion to JPY 10 billion, indicating most of the severance payments will be absorbed in the first half period.

While not mentioned specifically in the guidance, profit is expected to be buoyant in the second half of the year as Square releases Final Fantasy XIII in Japan on December 17.

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