Exclusive: Israeli mobile games company Playtika (Nasdaq: PLTK) will today notify employees of company job cuts worldwide, focusing on game development sites in Europe and North America North. Playtika will lay off 250 employees, or about 6% of the company’s workforce, at three game development studios in Los Angeles, Montreal and London. New games under development will be canceled and responsibility for certain activities will be transferred to Israel.
The measures are not expected to harm the company’s operations in Israel, Germany and its development centers and studios in Eastern Europe, including Ukraine, Belarus, Poland and Romania. Earlier this month, Playtika said it had 4,000 employees.
Playtika said: “The company is working to unify parts of its business. As a result, the London and Montreal development centers will be closed. Seriously studio operations in Los Angeles will be moved to Israel and Poland. Los Angeles will be closed and the closure of the studio in Helsinki is being considered, believing that there is great potential for the game that has yet to be realized.As a leading company in the market, working for the growth and profitability, we have chosen at Playtika to look at various measures.The company will continue to invest in long-established games and new games, while looking for investment and growth opportunities in games.
Rising interest rates and runaway inflation along with the recovery from the Covid pandemic have put enormous pressure on industries that have benefited from the pandemic, such as e-commerce, delivery and computer game companies. . Fewer and fewer users are trapped at home, reducing the time and money they spend on games. Even so, Playtika has remained a highly profitable business almost since its inception. Nevertheless, as a publicly traded company, it has seen its share price fall by more than 50% since its IPO on Wall Street in January 2021 and by 47% since November 2021, when tech stocks began to fall. fall. The company’s stock price closed 1.78% higher on Friday at $14.85, giving a market capitalization of $6.124 billion, and is currently 2% higher in premarket trading. .
Fearing that the global economy is heading into recession, Playtika is not the first game company to make cuts. India’s Mobile Premier League (MPL) announced yesterday that it was laying off 10% of its workforce and exiting operations in the Indonesian market. Last week, Chinese company Tencent announced it was expanding layoffs to include 10% of the workforce in its mobile games division.
Israeli mobile game company Playtika mulls search for buyer
Israeli tech companies have a lot to lose in Ukraine
Playtika’s Seriously studio in Los Angeles produces the popular game Best Fiends, which rivals King’s Candy Crush. According to Venturebeat, Playtika acquired the game in 2019 for $275 million. As noted, responsibility for the game will now shift to Israel and Poland.
Seriously was originally developed in Finland, where the future of another Playtika studio now hangs in the balance. However, Playtika’s Finnish operations based on last year’s acquisition of Rework, which develops the app Redecor, a mobile game for home decorating, will remain in operation.
Playtika’s Games Lab studio in London was created for casual games and aimed to have 150 employees and diversify its games portfolio, which has been dominated by games that simulate gambling such as poker games and slot machines. The studio will now be closed, although Playtika will retain its business development staff in London.
The center being closed in Montreal was once considered one of the company’s main studios, having developed the World Series of Poker, one of Playtika’s most successful games in its early years. But over the years, the Canadian center has lost its importance as more and more activities have been transferred to Israel.
The cuts will not affect operations in Eastern Europe, where Playtika was the first company to reopen operations in Kyiv and resume full operations, despite the ongoing war. Before the war, 1,100 Ukrainian employees worked in three centers in kyiv, Vinnytsia and Dnipro, where operations are suspended due to its proximity to the southern front. Although no Ukrainian employees are being laid off, 50 of them are being transferred out of the popular House of Fun slots business and offered alternative projects.
Despite Western sanctions against Belarus, Playtika continues to employ 600 people there and encourages them to move to the Warsaw offices it set up last year. Since the opening of the Warsaw branch, 300 Belarusian employees have moved to Poland.
Published by Globes, Israel business news – en.globes.co.il – on May 31, 2022.
© Copyright Globes Publisher Itonut (1983) Ltd., 2022.