News of the cuts came via an E24 report (translated by Google), which said that while the Norway-based Funcom has operations in China, Switzerland and the U.S., the majority of the cuts will affect the Norwegian team. Because of the layoffs, the company said, the planned launch of The Secret World, a new MMOG being developed for the PC and Xbox 360, will be pushed back by several months. Funcom stock dropped 18 percent following the announcement.
The reductions may seem unusual in light of the fact that they come less than a month after Funcom opened a new studio in Montreal, but as the report notes, the company’s intention was not to increase its numbers dramatically but to move its Norwegian employees to Quebec, where it could take advantage of the notoriously generous tax breaks offered by the province. That, coupled with “generally lower pay levels,” means the move could see payroll expenses at Funcom cut in half. The company has “invited” its 220 employees to relocate to Canada and says it will hire another 100-150 people for the Montreal studio over the next 18 months.
Funcom confirmed the cuts in an message on its website, saying it would “better align the Company’s operations to the current marketplace.” Plans for the Age of Conan expansion Rise of the Godslayer as well as its launch in Korea will continue as planned, although E24 noted that the game is still suffering a “continued negative trend subscription” rate.