Midway Games has been in a world of hurt. After Sumner Redstone sold off his majority stake in the financially troubled publisher, the stock plummeted and is in danger of being delisted from the NYSE. On top of that, Midway could be facing bankruptcy if it doesn't come up with $150 million soon.
Today, in an effort to reduce some of its costs, Midway announced a 25 percent headcount reduction in its global workforce (about 180 employees), spread across multiple disciplines and multiple locations. The company also announced the closure of its Austin, Texas studio, and the suspension of development on several "non-core" games. These projects had been scheduled to release in 2010 or 2011; Midway said they were never made public.
"The cost-reduction measures are vital for us to rationalize our operations and provide the resources necessary for our core properties to succeed," said 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."
According to an SEC filing, Midway is expecting a cash charge of $1.6 million for the fourth quarter, mostly due to severance pay for its laid off employees. Midway also said it will incur an additional charge of nearly $20 million related to bond repurchases requested by its bondholders after the Redstone sale.
- •Midway Closes Corporate Office
- •Amid Midway / Warner Bros. transition, Midway name up in the air
- •Midway Newcastle Struggles for Life
- •Midway Sets Itself Up for Auction
- •Midway Owners, Board Members Sued by Creditors
- •Midway May Be Purchased by Warner Bros.
- •Midway Price Tag at $30 Million
- •Rumor: Three companies looking to purchase Midway
- •Midway teases new game, details expected soon
- •Midway Looking to Unload Mortal Kombat
- •Midway owes millions to Epic, NBA, Warner Bros and many more
- •Midway Safe Until February 12
