Codemasters cans 25% of workforce
Codemasters, the privately held British games developer, is dishing out the P45s (UK version of pink slips) to 90 people - a quarter of its workforce.
The company says that market conditions have forced it to make the cuts at a time of instability, as the games industry moves to new platforms, such as PlayStation 2, Xbox and GameCube. The company's immediate release schedule is unaffected by the cuts, but it's going to be a bit slower churning out new games in the future.
Just a couple of weeks ago, Codemasters founders, Richard and David Darling appeared in the Mail on Sunday's list of Britain's 300 richest people. At the time, they said that being privately-owned meant that they could afford to take the long view. So how many would they have fired if they had to take a short-term
Oh, but the redundancies are a "short-term move the designed to retain financial stability throughout the transition to the new formats", the company says in a press statement.
But who's going to get the chop? Apparently team-leaders are "entering into a period of consultation to decide democratically where the streamlining should be made", according to an email newsletter from CTW, a UK publication for games publishers and retailers. Yeah, right. Those 90 names have already been decided, or I'm a Dutch uncle.
Final question: how come Codemasters is sacking so many people, when it has been profitable for all the 15 years that it's been in existence? On its website the company says that turnover for year to 30/6/1999 was £59 million, with profit before tax of £21 million".
But how much profit was retained within the company?
Was it in profit this financial year, considering market conditions, industry instability blah, blah, blah.
Considering that the games industry is cyclical, then perhaps a successful publisher should use some of the profit built up in good times to let it ride more smoothly through the bad. Alternatively, it may be better to refrain from deploying boom and bust hiring practices. ®