Publisher confirms scope of layoff plans, reduces Brian Farrell's salary from nearly $720,000 to about $360,000, trims possible severance package payout.
Rumors of THQ's recent round of layoffs apparently understated the issue. In a filing with the Securities and Exchange Commission today, THQ said that its restructuring plan to get out of licensed kids' games will result in the layoffs of "up to 240 selling, general, and administrative personnel worldwide."
It isn't just the rank and file THQ employees who are suffering the brunt of the company's recent financial woes. The publisher also announced that CEO Brian Farrell would be taking a 50 percent pay cut for the next year from $718,500 to $359,250. Should his employment be terminated for good reason, Farrell's parting compensation package will also be reduced. Instead of receiving triple the amount of his highest performance bonus from any previous year, Farrell would now only receive that base amount without the multiplier.
Last week, THQ announced a new, "streamlined" business direction that saw the publisher exit the children's game publishing business. The company said it will now focus directly on its core properties, franchises like Saints Row, Warhammer, Darksiders, Company of Heroes, UFC, and inSane.
Yesterday, global stock market NASDAQ issued THQ a delisting notice, stating that if the company's per-share value does not hit at least $1 for 10 consecutive days before July 23, 2012, it will be subject to removal from the market.
Brendan Sinclair has been a games journalist since 1999. His tastes are eclectic, though he has a definite affinity for games with arcade roots. He's Canadian, but has also been at home in Atlanta, Austin, Chicago, and San Francisco.
i believe if game companies can take a percentage of the profit of used games this wouldnt be a problem, they need to find a way to get rights to used games is what im saying, its there games they should own the profits it no-matter what. does this make sense to everyone?
@merleage2 And your company would probably go under within 5 days or at most a year. (Sad, but true.) Even people who love to make games don't love to make them all the time or for nothing.
A least the CEO is has manned up and taking a pay cut, which most don't so THQ can have a chance at making a come back.
The guy made 2.4 million in 2010. Probably another 2.4 million in 2011 (although his salary for 2011 was bigger). So a pay cut to %50 on his salary, brings him to what? $1.5 million? http://people.forbes.com/profile/brian-j-farrell/79755
@Vangaurdius I thought it was Relic who made CoH and the Dawn of war games, THQ just published it right? if so I dont really mind if THQ goes down as long as Relic can get their games made haha
if i owned a company everybody would make exactly 50,000 dollars a year. maybe there would be a chance to earn a little more based on work ethic and quality of the work done. cause you see my employee's would work for me because they love creating games, not for the money. also me and my ceo would make exactly 50,000 dollars a year, no special treatment for us. and if you cant live off of 4,600 a month then i don't know who you are or how you live but i don't want you working for me anyway. lol
Why THQ has problems? That company has released many great games that have sell millions of copies
@mjc0961 Iwata is very much an exception to the rule, as is Farrell. Seems to me like most companies' CEOs would off as many workers as necessary in order to hang on to their precious bonuses. I've never been a big THQ fan, but I hope they recover and regain stability.
@AcidSoldner homefront2 isnt been made by their own studios. It was contracted to cryteck. Also THQ saw homefront was a disaster and fired the studio that made it. Although i really like the unique approach into multiplayer.
uh... yeah.. all I want is Darksiders 2... I couldn't care less for the rest of their line up.
The problem with this has nothing to do with used sales. It's that THQ hasn't put out anything worthwhile for some time. What they need to do is release a sequel to a popular IP. Company of Heroes being the most logical choice right now. Put a lot of love into it and using the profits you make off of it spend almost every penny you can on coming up with another profitable IP. For example, they have the Dawn of War games, why not release a semi-tactical FPS that instead of doing what Space Marine did and focus on a small squad, instead focus on the large scale that occurs within said universe. This way they can balance out the small scale setting of their other games with a larger scale. One thing they could do is take a look at the largely untouched fantasy warhammer. Why warhammer though? Because they are familiar with the universe. That can really help in the long run. And though 40k and fantasy have evolved to become seemingly very different, the share certain properties that given their current experience, could save some time. Could use that to expand into an RPG. It would be fairly easy to make given the large amounts of lore available. My 2 cents anyways.
Sad to hear about THQ's current state. But at last they realized their mistakes by stopping kiddy games and Homefront (had serious flaws in online multiplayer). DOW - Retribution (previous version of DOW was awesome, this time boring...) Please continue making Saints Row, Warhammer, Darksiders, Company of Heroes.
A CEO taking a paycut when times are tough? Unheard of. And cutting the severance package so he can't just leave and get richer? That's insane! Why can't more companies do this? It at least shows that the people at the top knows there is some financial trouble. What would help would be some COH in the pacific.
THQ realised the flaws in their business strategy, but did it at high cost of cutting people jobs. I wish THQ will survive these dire events and will bring us new warhammer and company of heroes games. I wish the people who lost their jobs could find new jobs in this growing industry. It is a shame that the most widespread way to cut costs is to get rid of people
@nyran125 It is called used game sales and gamestop. That is what's wrong with the industry. Consumers think they have a right to used games and use that to justify give gamestop billions of dollars and the developer and its employees nothing. Then the consumer complains about online passes too. What a conundrum.
I hope they can recover, it seems like EA and Activision and Ubisoft will be the only ones left soon.
I bought Saints Row: The Third, today. If you support THQ and want to see them stay in business, and continue providing us with quality games, you can do your part, albeit a very small part. Buy a THQ game for yourself or your friend. Make sure you buy a new copy. A used copy will not send a single cent their way.
This really is tragic. 240 layoffs is 240 individuals left unable to pay bills or support their families in these harsh times. People have to realize that for a megapublisher, a $720,000 salary is actually quite low, so I really must commend Brian Farrell for cutting that number in half. By comparison, for the year 2010, Bobby Kotick (CEO of Activision) had a total salary of $5.6 MILLION--about 1 million of which was actually "salary" and the rest being stock options and bonuses. Best of luck to those affected by these layoffs.
Hard times for THQ. Hopefully they get through it, and hopefully those who lost their jobs find work quickly.
gaming will go into a recession one day soon, if they keep pumping $100 million into game marketing and most of that is going back into the shareholders pocket. If a company thats sold MILLIONS adn MILLIONS adn MILLIONS of games like THQ is going under. Then something is seriously wrong financially in the industry as a whole.
Good thing IMO, not that people are losing their jobs, but that companies are realizing that they need to quit with all the shovel ware...its unfortunate they are finding out the hard way. Don't say we didn't warn you...
They will pull through. if they make good games this restructing better damn well fix some of this crap cause with products like that going under would just be pitiful.
He had a $700,000+ salary?! No pity coming from this direction, even with 50% taken off. Make it 90%, then I'll consider it. But his salary covers about 23 average salaries!
I'm worried about THQ, but I hope they pull this off. They do make some good games, it'd be a shame for them to go under because of corporate mistakes rather than poor products.
This isnt cool news about thq, but their handling of the matter is invigorating. It's very rare to see high-ups take pay cuts, but not only did it probably save 4-5 peoples jobs, it is a good "inspirational" move to make. - Sidenote: It's also hard to believe that a CEO of a company as large as THQ only originally made $718,000 a year. If only some other companies(activision, cough cough) could handle the same structure lol. - Here's hoping THQ pulls through this, I know they have many eager fans.
It's saddens me that Homefront isn't listed as one of their "core franchises" even though it sold well over 1 million copies.
THQ has a lot of potential for 2013. They have Insane, Homefront 2, Devil's Third, and whatever comes from THQ Montreal. They just have to get through this year without going bankrupt to make it to that point. I hope they pull through. They have really improved the quality of their output in recent years.
Saints Row The Third may need some patching on pc but that game is so freakin awesome, that I will def keep my eye on the series.
THQ has for the most part released quality games, the original Red Faction, The Punisher, WH40K titles etc... I hope they get their act together and start pushing out the classics they once released next to the current-gen mindless games(50cent-crap, homefront etc...) they've been publishing
Wait... A CEO actually getting paid less for their company doing poorly? The hell? Is this bizzaro land where business makes sort of sense? I always assumed ceo's were supposed to drive a business into the ground, they normally get paid more that way... THQ isn't my favourite, but the fact even upper management has taken a hit means they got brownie points from me.
[UPDATE] Source says claim that project was sabotaged for financial reasons is "ludicrous," likens Free Radical to Ponzi scheme; studio cofounder Steve Ellis responds.
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