Mad Catz: 37% staff layoff to follow exec mass exodus

The writing was on the wall yesterday, and so today's news isn't terribly surprising: Mad Catz will be laying off 37-percent of its workforce, an announcement that follows yesterday's CEO and other executives' mass departure. The layoff news came alongside the company's newest quarterly financial report, the numbers for which were largely profitable. The restructuring will shed some financial burden, however, and will enable the company to better improve its competitiveness in the market.

The restructuring technically started yesterday, with Mad Catz President and CEO Darren Richardson resigning immediately, including departing from the board of directors. To fill that gap is Karen McGinnis, who has been working as Mad Catz' CFO. To fill her spot, then, is David McKeon, a then-VP and now the new CFO.

In another big change, the company's chair of the board of directors Thomas Brown resigned earlier this month, with John Nyholt taking over as board chairman. As if that weren't enough, general counsel (among other things) Whitney Peterson resigned, and former product development VP Andrew Young has been made CTO.

Following that mass exodus came today's financial reports, and though you'd expect it to be bad, the numbers were generally good, though overall profits were down. For its recent holiday quarter, Mad Catz saw its second best ever sales numbers, with net sales increasing 114-percent year on year (to $65 million).

The Americas proved particularly fruitful, with Mad Catz seeing a 391-percent jump in revenue (255% if we look at the past nine month's numbers), something that drastically eclipses the 6-percent drop its saw across the EMEA markets. The APAC regions, though, were hit hard with a 56-percent decrease. When tallied up, year-on-year profiles came in at $1.2 million versus $1.4 million.

Mad Catz points towards PC gaming and audio sales as being its weak points. Rock Band 4 saw heavy sales, though not as strongly as had been expected, leaving Mad Catz with excess stock and lower results from its (in hindsight) excessive promotional efforts.

This restructuring plan is anticipated to save Mad Catz $5 million annually, which if last year's sales hold steady will result in a slight profit in its next fiscal year. The company will have to take on a $3 million restructuring cost, though, which will eat into that savings initially. How many people are in the pipeline to lose their jobs isn't clear at this point, though it will include the executives that stepped down from their positions.

The Board of Directors didn't approve the restructuring plan until February 5.

VIA: GameSpot