Sierra hard-hit as VU Games axes 350 jobs

Vivendi Universal Games has announced that 350 staff have been laid off as part of the firm's restructuring efforts, representing some 40 per cent of its US workforce - with the toughest cuts coming at the Sierra operation.

Reports this morning indicate that almost the entirety of the staff at the former Sierra offices at Bellevue, Washington have been laid off, and the office itself is due to close within the next two months - although it's expected that VUG will continue to use the Sierra brand.

The closures of two studios last month - Papyrus Studios (creators of the NASCAR titles) and Impressions Games (creators of strategy titles Zeus and Cleopatra) have also been included in the layoffs figure which was released last night.

However, the Blizzard Entertainment studio apparently remains unaffected by the layoffs, with none of its staff - currently working on massively multiplayer title World of Warcraft, which is due for release later this year - being made redundant in the move.

"Restructuring the organisation and reducing our cost base are necessary to improve our operating effectiveness and profitability," according to VU Games CEO Bruce Hack. "This constitutes another important step in our turnaround plan aimed to better position the company for growth."

It's not yet clear which products will be affected by the layoffs; although CNN/Money this morning reports that the Hoyle range of card and board game adaptations will be cancelled as a result of the Sierra closure. Titles such as Ground Control 2, Half-Life 2 and Tribes: Vengeance, which are being published on the Sierra label, will not be hit as they are being worked on by external developers and handled by the VU Games parent.

In related news, former Vivendi Universal chairman Jean-Marie Messier has been arrested by French police this week in connection with an alleged stock manipulation scheme; his arrest follows the earlier arrests of former CFO Guillaume Hannezo and two other senior executives. Messier was replaced by current CEO Jean-Rene Fourtou in mid-2002 after it emerged that Vivendi Universal was on the verge of bankruptcy following an acquisition spree on Messier's part.