SCi slashes 200 jobs, 14 games
CEO says "SCi is in need of immediate change" as company sheds 25 percent of headcount, drops more than a dozen in-development projects.
It wasn't so long ago that Eidos was on its way up. The publisher successfully resuscitated the moribund Tomb Raider franchise with Tomb Raider: Legend, saw its CEO Jane Cavanagh receive an OBE from the Queen, and entered preliminary discussions to be acquired.
The publisher's fortunes have turned again, as the acquisition talks dried up, Cavanagh resigned under shareholder pressure, and now the company's prepping for a round of layoffs. New CEO Phil Rogers today unveiled a restructuring plan that will trim a quarter of the company's staff--some 200 people--with 14 unspecified games canceled because they were "unlikely to generate an acceptable return on investment or are not of appropriate quality." The company plans to reduce its annual operating costs by £14 million (approx $28 million) by the end of June, resulting in a one-off cost of £7 million ($14 million).
Roger's turnaround plan is threefold; to change the structure from a "centrally controlled development and publishing model to a studio-led business focused around cornerstone products, such as Tomb Raider, Hitman, Championship Manager, and Deus Ex"; to create a new brand, Eidos Play, focusing on casual gaming; and to make its distribution processes more flexible and efficient.
"To get SCi on track we have to act rapidly and effect change quickly," said Rogers. "We must allow the world-class people that we have within the Group to focus on strong, profitable titles which will create the value our shareholders deserve... I am confident our staff share this vision and excitement for the future, and determination to build a working environment where our innovation and creativity can be commercially realised."
SCi also indirectly addressed the recent rash of mergers and acquisitions in the industry, saying that the board of directors isn't "encouraging offers" for the company. However, given the consolidating industry around it, SCi will consider any "sensible offer... or proposal for crystallising value for some of the group's IP..."
Along with the restructuring plan, SCi laid out its financial results for the six months ended December 31, 2007. The numbers back up Rogers' call for immediate change. Despite a record-setting holiday season for the industry, revenues for the period were down about 2 percent to £73 million ($146 million). And thanks to £79.6 million ($159 million) in development costs, SCi posted mounting operating losses of £81.4 million ($162 million), up 350 percent from £17.9 million ($36 million) posted over the same period the year before.