Politics Announce today (Tuesday) its employees on a worldwide-wide austerity move that is expected to focus on game development sites in Europe and Canada. The move involves the dismissal of about 250 employees, about 6% of the company’s employees – at three game development studios: Los Angeles, London and Montreal, the cancellation of new games that were in development and the transfer of responsibility for some activities to Israel. The move is not expected to harm the company’s operations in Israel, Germany and the development centers and studios in Eastern Europe – including Ukraine, Belarus, Poland and Romania. Earlier this month, Playtica reported that it employs about 4,000 people worldwide.
Rising interest rates and rampant inflation, in parallel with the recovery from the corona plague have led to tremendous pressure on e-commerce companies, shipments and also on computer game companies. Fewer and fewer users are locked into their homes, which inevitably reduces the time they invest in games and the money they are willing to spend on it. Although Playtica is a very profitable company almost since its inception, easy and material as a listed company, its share has fallen more than 50% since it was issued on the Nasdaq last year, and by about 47% since November last year, with the onset of the ongoing stock market crash.
In an atmosphere of entry into a global economic slowdown, Playtica is not the first to make cuts in the field of gaming. It was preceded by the Indian Premier League gaming company MPL, which yesterday cut 10% of its workforce and went out of business in the Indonesian market. Last week, the Chinese app Tencent expanded its round of cuts to include about 10% of its mobile games division employees.
One of the company’s leading development sites will be closed
The move includes, as mentioned, the closure of some studio sites and the transfer of some of the activities to other sites. In Los Angeles, Playtica closes the studio Seriously, the maker of the popular game Best Fiends, a kind of competitor to King’s Candy Crush. The development activity of the game will move to Israel and Poland and will be integrated into a larger lineup. According to publications on the Venturebit website, Playtica acquired the game in 2019 for $ 275 million. It was originally developed by Seriously from Finland, which is currently active as an additional studio under Playtica and the fate of the employees there is currently being examined by management.
In Finland, Playtica will maintain another activity, that of Rework, which it acquired last year, which develops the Redecor app, a kind of mobile game for interior design enthusiasts, which presents players with challenges from the world of home design.
In London, Playtica set up the Casual Games Lab with the aim of employing 150 people and diversifying its gaming portfolio, which until that year was dominated by gambling-like games – such as poker games and slot machines. Now, the studio is expected to close, although in London Pleiatica will continue to employ workers in the business development field.
The center, which closed in Montreal, was once considered one of the company’s leaders: it developed one of its most successful games in its early years, the World Series of Poker, but over the years lost its importance as more and more of its activities moved to development in Israel.
“The company will continue to invest in the old games and new games”
The round of cuts does not include layoffs in Eastern Europe, as mentioned. Playtika was the Israeli company to announce the reopening of its offices in Kiev and a full return to work in the attacked country. The company had 1,100 pre-war workers employed at three sites: in Kiev, in Vinnitsa in the west of the country, which continued to operate even after the outbreak of the war, and in Dnipro, which is on strike due to its proximity to the southern front. Although the company avoided layoffs in the war zone, Globes has learned that 50 employees of Playtica’s popular house machine fun app have been transferred from operations under the product and offered alternative projects.
It was also learned that despite the boycott of many Western companies over Belarus, Playtika continued to employ 600 of its employees in the country, encouraging them to move to work from offices it inaugurated in Warsaw last year. Since the opening of offices in Poland, about 300 Pleiatica employees from Belarus have moved to Warsaw.
Playtica reported earlier this month revenue of $ 677 million in the first quarter of 2022, a 6% increase over the same quarter last year, and a 133% increase in net profit to $ 83 million. However, EBITDA, excluding depreciation and provisions, shrank from $ 258 million to $ 220 million, thanks in part to an increase in marketing expenses.
Playtica said: “The company will operate for one part of its operations. As a result, development branches in London and Montreal will close. The studio activity under Seriously will move from Los Angeles to Israel and Poland. The studio in Los Angeles will close “As a market-leading company, operating for growth and profitability, they have chosen Pleiatica to examine the various steps. The company will continue to invest in the old games and new games, along with the search for investment opportunities and growth in the games.”