Work force, games cut at Midway
EmptyIn its first major move since Sumner Redstone sold a controlling stake, video game company Midway Games unveiled several cutbacks Tuesday, including a 25% staff reduction.
The company behind the "Mortal Kombat" franchise has struggled to create new hits and said the economic downturn has "amplified" its challenges.
Overall, video game sales have remained strong across the industry despite economic woes.
In addition to the layoffs of about 180 employees in its Austin, Chicago and San Diego offices, Midway is shuttering an Austin studio and suspending development work on unnamed noncore games that had been scheduled for 2010 and 2011.
In a regulatory filing, Midway said it expects to incur a charge of about $21.7 million in the fourth quarter to account for the streamlining.
"The cost-reduction measures are vital for us to rationalize our operations and provide the resources necessary for our core properties to succeed," Midway president and CEO Matt Booty said.
Redstone's holding company, National Amusements, recently sold its 87% stake in Midway to little-known investor Mark Thomas. NA also is expected to sell some or all of its movie theaters. (partialdiff)