NCsoft-Austin lays off 70

[UPDATE] Company undergoes "immediate restructuring"; slowdown in number of planned game launches leads to "streamlining" of operations.


Tabula Rasa
City of Heroes
City of Villains

Late yesterday, word circulated online that massively multiplayer online game publisher NCsoft had undergone a significant round of layoffs. This morning, the publisher acknowledged that pink slips were, in fact, handed out at the Austin-based organization this week.

The company said approximately 70 of its 300 employees had been terminated.

In a statement, the company called the move, which affects NCsoft's Austin operation only, "an immediate restructuring ...that included the difficult task of reducing members of its workforce."

A spokesperson told GameSpot that none of the publisher's development teams have been affected by the move, noting that the Tabula Rasa team is still in hiring mode.

The company's prepared comment sought to cast the layoffs as a response to vagaries all publishers in the online space are subject to. "The online games industry is one that is continually changing with the scaling up and down of business based on product launches and product development schedules," the statement read in part.

But it also points to a more localized reason behind the layoffs--a slowdown in upcoming NCsoft launches: "As the company continues to grow its live products and prepares its next set of major online game releases for later in 2006 and 2007, the company sees a slowdown in its launch pattern and the need to streamline its business."

First word of the layoffs was traced back to a report on fan site A post cited a developer-only forum which listed the layoffs as a percentage of various NCsoft departments. Today, NCsoft staffers called the post incorrect, stating the figures listed were off by "high, double digit percentages." An NC rep said that while it is company policy not to break out layoffs by department, the numbers posted anonymously were incorrect, and "not just barely wrong, but all wrong."

Referring to two NC franchises, Auto Assault and City of Heroes/City of Villians, another NC rep said, "we are still assessing Auto Assault’s performance and can't comment on its current status. We can say that these sorts of changes are a result of many factors in our business, all of which are constantly being checked and rechecked as part of our regular assessment process." He added, "that COH/COV has been at 150,000 subscribers or more during the two years the franchise has been on the market."

While today's layoffs are dramatic, all is not doom and gloom for the publisher--its Guild Wars MMO title, released in April to favorable reviews, remains a constant tenant on the NPD Top 10 Best-Selling PC game chart. The most recent chart sees the title ranked at number nine.

In Korea, where NCsoft shares are traded (and where its headquarters are based), the stock has lost roughly a third of its value since May 3.

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