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THQ cuts 600 staff as losses hit $192 million

By Matt Martin

Thu 05 Feb 2009 8:17am GMT / 3:17am EST / 12:17am PST

24 per cent of workforce to go as company looks to reduce spending by $220 million

Saint's Row publisher THQ is to lay off 600 staff, around 24 per cent of its workforce, in a bid to reduce spending by USD 220 million in the next fiscal year.

The redundancies come as the company posted a massive USD 191.8 million loss for the third quarter ended December 31, with sales dropping 30 per cent to USD 357.3 million.

"We delivered high quality games to market this holiday season but fell short of our revenue and profit targets in this challenging environment," offered Brian Farrell president of THQ.

"We are taking highly targeted actions with the objective of investing in games with the highest franchise potential and returning to profitability. We have executed on our previously announced plan to reduce our cost structure by $120 million. Given continued economic weakness, we plan to reduce costs by an additional $100 million."

THQ plans to cut USD 70 million through studio dispositions and other project and staff lay-offs, and a further USD 30 million by reducing sales, marketing and corporate expenses.

"Our focus for next fiscal year is to return to profitability and to generate cash. Our fiscal 2010 plan will reflect the benefits of our focused product strategy and strong actions on costs," said Farrell.

The company added that it would not provide guidance for its fiscal fourth quarter due to "economic uncertainty and limited visibility", adding that the company "continues to experience a cautious retail and consumer environment."

During the third quarter, THQ shipped more than 4 million copies of WWE Smackdown Vs RAW 2009, 700,000 units of de Blob and 1.2 million copies of Big Beach Sports.

Saints Row has also shipped a total of 2.6 million units to date.

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