CEO to halve salary to $360,000
Some 240 workers are to be made redundant at THQ as the company embarks on a sweeping cost-cutting operation.
The company is preparing to axe more than ten per cent of staff, primarily in non-development divisions. CEO Brian Farrell – who has faced calls to resign – will have his salary halved, from $720,000 to $360,000.
The major restructuring comes after THQ’s big risks in the kids' licensed games market failed to pay off.
THQ said that the reorganisation cost $11 million, primarily in severance costs for affected employees. The cuts will adjust the company's operating expenses “to better align with the expected revenues under the updated strategy".
The publisher, which currently employs around 1,700 people, has also been threatened with a Nasdaq delisting.
Over the next two months the company will implement the majority of its restructure, with the entire operation to be completed by September 30th.
Despite having released successful titles last year, THQ has recently found itself engulfed by rumours of layoffs as a result of poor performance.
Yesterday the company announced it had been threatened with delisting from the Nasdaq stock exchange.
THQ’s fortunes downturned sharply following the release of its casual product, U Draw.
“U Draw performed OK in the US when it first arrived in 2010, and performed solidly in Europe in early 2011. But when THQ relaunched the platform over Christmas last year, which included versions for PS3 and Xbox 360, revenues were well below expectations," says MCV deputy editor Chris Dring.
"That led THQ to lay off staff from the development team, including kids, family and casual boss Martin Good."
In the past twelve months THQ has closed several games studios across the globe as part of a cost-cutting operation.
Kaos in New York, as well as studios in the UK and Australia, have all been emptied.
THQ appears to be betting the bank on its subsidised Montreal mega-studio, which is planned to house several hundred developers to make a range of triple-A games in tandem.