So much for recession-proof: THQ has announced it is shutting down five studios and laying off employees at two more, less than a week after EA revealed hefty staffing cuts of its own.
A THQ rep confirmed earlier reports of the layoffs with Gamespot today, revealing that Paradigm Entertainment, Mass Media, Helixe, Locomotive Games and Sandblast Games have all been closed down, while Rainbow Studios and Juice Games will continue to operate but have been hit with layoffs. “It’s just constantly trying to react dynamically to the market, whether it’s because of things happening to our industry or the economic environment as a whole,” the rep said. “It’s making sure that we’re set up over the next three to five years to be profitable and successful.”
The number of employees impacted by the layoffs was not revealed, nor were the names of any projects that have been canceled or delayed as a result of the cuts, which were blamed by THQ Chief Brian Farrell on “market dynamics” and “today’s difficult economic environment” in a letter published yesterday by Kotaku.
“We have discontinued a number of projects from external developers, as well as certain projects within our internal THQ studios. In a number of cases, the cancellation of a project means that the THQ studio working on that project will be closed,” Farrell said in his letter. “Our senior PD and HR teams are on the ground at each of the affected studios today, meeting with the employees to discuss severance packages and outplacement services, as well as potential opportunities on other THQ products.”
Unfortunately, THQ’s struggles aren’t new: In May, at the end of its 2007/2008 fiscal year, the publisher reported a net loss of over $35 million for the year and said approximately 200 jobs would be cut as a result, while changes to its upper management structure were announced in early October, which Farrell said would “create a more efficient structure” for the company.