Midway Cuts 180 Jobs, Closes Austin Studio UPDATED

Midway Games Reports 2Q Earnings

Blog@: Alex Ross Covers MK v DCU
Blog@: Alex Ross Covers MK v DCU
The AP reported earlier today on the latest of Midway Games Inc.’s health. Unfortunately, it’s more bad news for Midway, and worse news for individual employees of the company.

25% of Midway’s remaining workforce, after earlier cuts this year, was laid off today. That comes out to 180 people, or the entire Austin Studio plus a large chunk from Chicago, Midway’s home base. This closes the Austin Studio, which had projects cut a few months back. More in development projects have been cancelled in this latest effort to plug the holes of the sinking ship. This round cut more “non-core projects” which were again not specifically disclosed, but likely means everything not officially announced at this point. The games in question were on the 2010-2011 schedule, indicating senior leadership may not be looking too far into the future any more.

The holiday firings will actually hurt in the short-term, as about $1.6 million in severance will be paid to the employees in question. With this, projected further losses for the final calendar quarter, the delisting warning, the extremely low selling price of the company last month, and multiple changes at the corporate level this year, the writing certainly seems to be on the wall for the longtime publisher/developer. What this will eventually mean for long term franchises like Mortal Kombat and Blitz remains to be seen. The latest edition of Mortal Kombat has been well received critically, but was released in probably the heaviest triple-a holiday season ever.

No buyout offers from the big publishers like EA, Activision Blizzard, and Time Warner Entertainment have been talked about yet, but with their recent partnership, it seems Warner would be a good fit. Their sights seem to be set elsewhere at the moment, as they just yesterday purchased 20% of Eidos Interactive, who are currently working on Batman: Arkham Asylum.


Speaking exclusively to Newsarama on the condition of anonymity, one of the laid off employees has given us more details. The layoffs in Chicago have affected all but two teams there, leaving the Mortal Kombat team and a team working on a Mortal Kombat adventure game. The Newcastle, England Studio was virtually unaffected- for now. Wheelman, their current property, is due out in the next couple of months, and currently close to submission. Speculation by employees at Midway is this will be the studio's final game. Likewise, Seattle Studio's This is Vegas is due  next summer, and internal speculation has even that game possibly not being published by Midway themselves. One game that was about halfway through development at Chicago has already been shopped around to other studios, possibly allowing completion elsewhere. That may or may not allow some of the 100+ people laid off from the Chicago Studio to go with the game, however.

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