Midway Newcastle shuttered, Chicago layoffs 'imminent'

[UPDATE] Following Warner Bros. buyout, publisher closes UK branch and is set to downsize its Chicago operations; San Diego studio looks likely to close on August 31.


Following a protracted bankruptcy and some last-minute legal wrangling, Midway Games has finally been sold. According to a corporate spokesperson, "the sale to Warner Bros. of substantially all of the assets, IP, and trademarks of Midway Games was closed this past Friday."

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[UPDATE] Midway has not yet officially revealed how the sale will affect its Chicago, Illinois, headquarters. However, a source close to the operation informed GameSpot that "layoffs are imminent" among staffers who were not hired by Warner Bros.

Any staff reductions will likely not affect the developers behind Midway's flagship fighting series, Mortal Kombat. Last month, series creator Ed Boon indicated that his team is hard at work on the next game, which will return to the franchise's ultraviolent, M-for-Mature-rated roots. The series, which is also reportedly providing the basis for a third Mortal Kombat film, was one of the main reasons Warner Bros. offered $33 million for the majority of Midway.

Midway did confirm that its British shop, which was not bought by Warner Bros., has been shuttered. "We can confirm that the Newcastle studio has been closed following the notification period required by UK law," a rep said. "We made every effort to find a buyer for the studio, but unfortunately, none emerged during the period." About 80 people worked at the studio, which developed this year's Vin Diesel vehicle The Wheelman. The fate of its current project, the action game Necessary Force, remains unclear.

Things are also not looking good for Midway's San Diego studio, which, too, was not part of the Warner Bros. acquisition. According to a filing with the Securities and Exchange Commission last week, Midway is planning to close the San Diego studio, which employs about 20 percent of the publisher's overall workforce. The company is also taking a write-down of $4 million as a result of the cancellation of an unnamed game, which was in the works at the Southern California shop.

"Midway San Diego has been given 60 days [on July 1] notification under the WARN act, and as long as the studio is open, it is possible for bidders to make an offer for the studio," a rep told GameSpot. The WARN--or Worker Adjustment and Retraining Notification--Act was passed in the late 1980s and requires employers to give two months notice to employees in case of "mass layoffs."

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