Funcom, Gearbox Hit With Major Layoffs

Things are looking increasingly grim in the videogame industry as both Gearbox Software and Funcom have been hit with significant layoffs.

Up to 25 employees at Gearbox were recently cut as part of "transformative changes" at the company, according to ShackNews (via Develop). The layoffs were originally rumored to be the result of the cancellation of Aliens: Colonial Marines, a shooter in development for the PC, Xbox 360 and PlayStation 3, but Gearbox President Randy Pitchford denied that was the cause. "Aliens isn't canned," he said. "We've made some transformative changes and yes, that's meant some talent changes, but that's not the real story. The true relevance of the story will actually be irrelevant until we release our next game, at which time I hope there will be a lot of interest in what we've done that can produce such results."

In a separate statement to Kotaku, Pitchford said the layoffs represented a new strategy at the company, "[away] from being about opportunity, ambition and growth to a strategy that is oriented towards quality, focus and performance." He added that the layoffs were a "tactical decision" that reflected the company's commitment to its new direction.

Meanwhile, MMOG developer Funcom appears to be having problems of its own: Over the weekend, Ten Ton Hammer reported on a rumor that the company had laid off 70 percent of its U.S. workforce, primarily from the Customer Service and Quality Assurance divisions. That rumor has now been confirmed in a one-line statement to the site in which Funcom said, "We did have some staffing cuts at Funcom this week as well as new positions opening in the organization as part of our ongoing cost based efficiency and performance initiatives that are vital to any business."

Roughly 60 jobs are reported to be affected by the Funcom layoff, which Gamasutra says is the result of news that Age of Conan, the company's recently launched flagship MMOG, has been "underperforming" and experiencing shorter than expected subscription periods.

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Why can't companies call these "transformative changes" firings?

"He added that the layoffs were a "tactical decision" that reflected the company's commitment to its new direction." Yeah, we got rid of people so the company's commitment to its new direction will be successful, which is saving money.

I'm not against them saving some money by cutting jobs, I just hate the middle management language they use.

Tactical decision? Such an odd way of saying: "We're canning people because we screwed up somewhere, somehow".

I find it hilarious when I read stuff like this and then people tell me that the video game industry is recession proof.

"Wait, so firings this massive are just normal in your industry?"

I've actually been surprised at the sales a lot this year's big titles have been posting. They are much better than I thought they were going to be. That said this recession will definitely trim off some of the fat on the edges.

In particular I think we can expect to see competent but uninspired games selling much fewer copies than they would have in better times and Age of Conan...well I'm not sure that was going to make it even with a good economy.

It's a shame to see Gearbox in such a state. Hopefully, this decision doesn't affect the next Brothers in Arms.

Anyone know how this might effect Borderlands?

Danzorz:

CountFenring:
Anyone know how this might effect Borderlands?

It better not...that game holds promise....

Yeah, I already pre-ordered.

Somethingfake:
Why can't companies call these "transformative changes" firings?

Sounds more like an overseas movement. Replacing American labor with cheap foreign labor.

Makes sense in a way, since overseas shifting was an issue raised during the Election. Best to do it while that while Bush still holds office in case Obama changes it.