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SCi/Eidos Cuts Workforce By 25%, Cans 14 Projects

SCi/Eidos Cuts Workforce By 25%, Cans 14 Projects

February 29, 2008 | By David Jenkins

February 29, 2008 | By David Jenkins
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Representatives from Eidos Interactive parent company SCi, have revealed a radical new business plan for the company, which will see a fundamental change in its business structure as 14 projects are canceled and a quarter of all staff made redundant.

The company’s structure will be changed from a centrally controlled development and publishing model to a studio-led business focusing on existing high profile franchises such as Tomb Raider, Hitman, Championship Manager and Deus Ex. A new division named Eidos PLAY will also be created to help coordinate the company’s casual and new media resources.

A drive to increase the quality of products will see the cancellation of 14 projects which the board considers “unlikely to generate an acceptable return on investment or are not of appropriate quality”. Attempts to increase product innovation and quality will see production services, including localization and quality assurance, moving from London to the company’s Montreal studio.

As part of cost reduction plans, the company plans to cut its workforce to no more than 800 people " necessitating a 25 percent cut from the current headcount. The new plans also call for annual operating costs to be cut by £14 million by the end of June 2008, at a cost of £7 million.

The radical change in approach has been brought about by the company’s latest interim financial results, which show a £81.4 million loss in the six months to December 31st, an increase on the £17.9 million loss at the same time twelve months ago.

The company has also been hit by a rapidly falling share price, after ongoing takeover talks fell through. This situation was worsened following Electronic Arts’ attempted acquisition of Take-Two, as investors concluded that no bid for SCi was likely to be made in the short term. Nevertheless the company has indicated it will consider any acquisition offers, while admitting it currently has none on the table.

"SCi is in need of immediate change,” said CEO Phil Rogers to UK trade paper MCV. “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.”

“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. I am confident our 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," he said.


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