Money troubles 'spark layoffs at China giant The9'
Thursday, 12th April 2012 at 5:32 pm
Company confirms restructure; Rumours of 50% staff cut 'exaggerated'
One of the most prominent Asian games companies is thought to be commencing a downsize restructure following sustained financial problems.
The9 was rumoured to be axing half its headcount – a comment that the company has branded an exaggeration – after an alleged former employee at the company broke silence on the matter.
The group’s NASDAQ 2012 share price peaked at $7.93 on February 14th, but since sunk by more than 30 per cent to $5.35 some six weeks later.
Shares appear to be growing again, hitting 6.46 at the time of going to press.
The9 reported net losses of $45 million during its most recent investor meeting; some 43 per cent down from last year.
“In accordance with the needs of our business, The9 has recently begun strategic adjustments,” the company told the Beijing Times.
“We are optimising operations programs and the relevant human-relations structures, and this optimisation to increase the efficiency of the company is a necessary adjustment,” it added.
The9 has strained to keep its business growing since 2009 when it lost rights to host World of Warcraft across Asia.
In January 2011 the company established an ambitious $100 million fund to help finance mobile game development both internally and with external partners.
It is unclear how the initiative has progressed since its announcement last year.
The company is gambling much of its success on a game called Firefall, which its CEO has branded “a revolutionary next-generation triple-A title MMOFPS game, which will be presented to online gaming enthusiasts worldwide.”
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