Gameplay Will Cut 275 Jobs, Close Shops In Restructuring Bid to Reach Profitability
February 2, 2001
Tech Center
Gameplay Will Cut 275 Jobs, Close Shops
In Restructuring Bid to Reach Profitability
A WSJ.COM News Roundup
LONDON -- Gameplay PLC said Friday that it plans to cut 275 jobs and close retail outlets in a restructuring intended to shorten the path to profitability.
1Amazon Lowers 2001 Sales Outlook, Says It Will Lay Off 1,300 Employees (Jan. 31)
2Disney to Shut Down Go.com Portal, Eliminate Tracking Stock for Net Unit (Jan. 30)
3Gameplay.com, Dixons Unite in Video and Computer Games (Aug. 15, 2000)
The British computer games group will sell or close non-core businesses and activities, reduce operational sites across Europe to 10 from 16, and close its eight retail outlets in the United Kingdom. Gameplay estimates that these changes will reduce its cost base by at least 12.5 million pounds ($18.48 million) annually.
Gameplay also plans to split its operations into two divisions, one focusing on technology -- including e-commerce and online gaming -- and the other on boxed games.
In what appeared to be the first act of the Gameplay's restructuring before Friday's statement, the company said on Jan. 31 that it had sold its Vienna-based development studio, NEO Software Produktions, to Take Two Interactive Software Inc. of the U.S. for 500,000 pounds in cash.
Gameplay, which has undertaken the plan expressly to boost profits, said recent business activity has been stronger than expected and it has increased its revenue estimate for the six months to Jan. 31, 2001, to 43 million pounds from 40 million pounds.
The layoffs come after a spate of job losses in the Internet, e-commerce and telecommunications sectors in the last few days.
Hong Kong-based Pacific Century CyberWorks Ltd. said Friday that it is planning to cut some of its London-based staff at its broadband-satellite and cable-based network entertainment Network of the World. As many as 30 of its Internet and telecommunications employees based in London are expected to lose their jobs4.
U.S. online retailer Buy.com Inc. Thursday reported lower year-on-year sales and said that it will shut down its Canadian store and sell its United Kingdom operations, resulting in 25 job losses5.
Amazon.com Inc. plans a 15% cut in its work force, some 1,300 employees, and the closure of two facilities as it struggles to reverse steep losses, the online retailer said on Jan. 31.
Also this week, Walt Disney Co. said it will absorb its Internet tracking stock and close the faltering Go.com Web portal to focus on the development of individual sites, resulting in 400 layoffs out of the 2,100 employees in Disney's Internet operations, while Terra Lycos SA said it has laid off 24 middle-management employees at its Miami headquarters as part of a reorganization of its Latin American operation.
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