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SCi Announces Layoffs, Restructuring

| 29 Feb 2008 14:57
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Eidos parent SCi Entertainment has announced a major restructuring plan for the company that will include staff layoffs, numerous project cancellations and a move of the company's production services out of the U.K.

The changes follow the release of SCi's interim results for the second half of 2007 and a business review led by the company's new CEO, Phil Rogers, who took over from former chief executive Jane Cavanagh in January. Cavanagh, along with Managing Director of Publishing Bill Ennis and Managing Director of Studios Rob Murphy, was forced out by shareholders dissatisfied by SCi's dismal financial performance and the failure of potential takeover talks.

"SCi is in need of immediate change," Rogers said in the restructuring announcement. "Following our business review over the last six weeks, we are initiating a clear action plan based on three fundamental strands of activity: A radical change in our structure to a studio-led business, a top to bottom program of product improvement and efficiency and a considerable cost reduction plan."

As a result, 14 ongoing projects considered by the board as unlikely to succeed to an acceptable level will be canceled. The company will instead now focus on "cornerstone products," such as Tomb Raider, Hitman, Championship Manager and Deus Ex, while a new division called Eidos PLAY will be formed "to fuse together casual and new media resources to attack growing markets." To achieve cost-cutting goals, SCi is planning to lay off 25 percent of its current workforce and relocate its production services, which include localization and Q&A, from London to Montreal in order to take advantage of the city's lower operating costs. Annual operating costs are planned to be cut by $27.8 million by June 2008.

"To get SCi on track we have to act rapidly and effect change quickly. We must allow the world-class people that we have within the Group to focus on strong, profitable titles which will create the value our shareholders deserve," Rogers said. "I am confident out staff share this vision and excitement for the future, and determination to build a working environment where our innovation and creativity can be commercially realized."

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