Israeli mobile gaming company Playtika starting today with global layoffs, amidst worries that the world economy is approaching a recession. The company is focusing on game production facilities in Europe and North America, Israeli business newspaper Globes reported.
The rise in interest rates and rampant inflation, along with the recovery from the COVID pandemic, reduce the number of people confined to their homes, hence decreasing the quantity of time and money spent on video games. All those have exerted enormous pressure on sectors that benefited from the pandemic, such as e-commerce, delivery, and computer gaming.
Playtika now will lay off 250 employees, or approximately 6% of its total workforce, across three game development studios in Los Angeles, Montreal, and London. Israel will take over some operations and stop making new games that are already in the works.
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Globes added that operations in Israel, Germany, and its research centers and studios in Eastern Europe, including Ukraine, Belarus, Poland, and Romania, are not likely to be affected by the situation. Playtika said earlier this month that it had 4,000 workers.
Playtika added, “The firm is attempting to integrate certain aspects of its operations. Consequently, the London and Montreal development centers will be closed. The Los Angeles-based Seriously studio will relocate its operations to Israel and Poland.
“The Los Angeles studio will be shut down, while the Helsinki studio’s closure is being discussed due to the game’s unrealized potential, which is believed to be substantial.
“As a market-leading firm striving for development and profitability, Playtika has opted to study numerous indicators.
“The firm will continue to invest in both established and new games, while also exploring investment possibilities for expansion in the gaming industry. “
Playtika’s Los Angeles-based Seriously studio makes the popular game Best Friends, which competes with King’s Candy Crush. According to Venturebeat, Playtika paid $275 million for the game in 2019. Now Israel and Poland will now assume responsibility for the game.
Playtika has been a tremendously lucrative firm since its inception. Nevertheless, as a publicly listed firm, its share price has declined by more than 50 percent since its IPO on Wall Street in January 2021 and by 47 percent since November 2021, when tech stocks began to decline. According to macrotrends.net Playtika Holding net worth as of May 30, 2022 is $6.12B.
Playtika is not the only gaming company to announce layoffs. The Mobile Premier League (MPL) announced yesterday that it will lay off 10% of its workforce and exit the Indonesian market.
The Chinese company Tencent stated last week that it would lay off 10 percent of its mobile gaming division’s workers.
Seriously was initially created in Finland, where the future of a second Playtika studio is currently uncertain. However, Playtika’s Finnish activities based on last year’s acquisition of Rework, which created the interior design mobile game Redecor, will continue to operate.
Playtika’s Games Lab London studio was established for casual games with the intention of employing 150 people and diversifying its games portfolio, which has been dominated by games that resemble gambling, such as poker and slot machines. Playtika will maintain business development personnel in London despite the closure of the studio.
The Montreal location was formerly regarded as one of the company’s premier studios, having produced the World Series of Poker, one of Playtika’s first and most profitable games. The Canadian center has lost significance over the years as more and more operations have been shifted to Israel.
The reduction will not impact operations in Eastern Europe, where Playtika was the first to reopen in Kiev and resume full operations despite the current conflict.
Despite Western sanctions, Playtika continues to employ 600 individuals in Belarus and is urging them to migrate to the headquarters it established last year in Warsaw. Since the Warsaw branch’s launch, 300 Belarusian employees have relocated to Poland.
Prior to the Russian invasion, 1,100 Ukrainians worked at three facilities located in Kiev, Dnipro, and Vinnytsia, where activities have been discontinued due to their proximity to the southern front. Even though there won’t be any layoffs of Ukrainian workers, 50 of them will be moved away from the popular slot machine game House of Fun and given other jobs.