Mobile-games company Rovio is cutting its global workforce by 39% to focus on a few products that make more money. This is the second time the Angry Birds maker has announced job cuts in less than a year.
Some 260 people are to be affected by the layoffs across Rovio's games, media, and consumer products categories. Based in Espoo, Finland, the company has offices in Stockholm, London, New York, Los Angeles, Vancouver, Shanghai, Seoul, and Tokyo.
In 2009, the game developer launched its Angry Birds app for mobile devices. The game, which allows users to slingshot bird avatars at obstacles, became a global hit within less than two years.
Capitalizing on the franchise's popularity, Rovio branched out into many other areas. It licensed its brand to sell such items as teddy bears, books, notebooks, pens, softdrinks, and candies. The Finnish company also has amusement parks, an e-learning service for kids, and a cartoon channel.
But the merchandise business has not been as successful as the core games business. The company disclosed last March that revenue in its "consumer products" category in 2014 was at 41.4 million euros, down 43% from a year earlier. On the other hand, revenue in the games business was at 110.7 million euros, up 16%.
"In our current financial condition we must now put focus on where we are at our best," CEO Pekka Rantala said in a statement.
But Rantala said staff working on an Angry Birds movie, set for release in May 2016, will be spared from the job cuts.
Rovio now has more than 20 games, having released Angry Birds 2 just last month. The updated version has already been downloaded more than 50 million times. But it's less popular than competing games like Game of War, Clash of Clans, and Candy Crush Saga which have been leading the top-grossing category in the US charts for months.
Angry Birds 2 managed to take the 42nd spot, shortly after its release.
Over the years, the freemium model, upon which Angry Birds is based, has become less exuberant. What's all the rage now are free-to-play games, micro transactions, and waiting times. That's a new world of gaming that Rovio must now face to remain relevant.
"(I)t is certain that a leaner and more agile Rovio is absolutely necessary to move forward and take the company to new successes in the future," said Rantala.
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