How To Lay People Off in the Video Game Industry

A layoff is a layoff is a layoff, to misquote Gertrude Stein. Surely, they all suck. But they also happen. Some would say they have to happen, capitalism being what it is and such and such.

So, all of you big, powerful gaming industry executives who employ people to read Kotaku for them, when you are laying off other people in the gaming industry, don't do it the OnLive way:

We don't respond to rumors and have no comment.

The exciting news is the first VIZIO Co-Stars (Google TV stream players) with the OnLive app built-in have just arrived in customer homes, and our second of three 'Indie Giveaway Weekends' is going on now. OnLive users can get a free copy of the award-winning games Space Pirates and Zombies and SpaceChem (more details on our blog here: blog.onlive.com).

Don't do it the Activision Vs. Infinity Ward way:

Fenady testified that he expressed concern about the project but was told, "Don't worry about the repercussions." Fenady found an outside company, InGuardians, who also balked at the task because of "legal hurdles." Stymied, Fenady approached the company's Facilities Department and talked about staging a "fake fumigation" and a "mock fire drill" in order to get West and Zampella away from their computers long enough to copy files on their computers. (as reported by the LA Times)

Don't do it the THQ way:

Kotaku has heard from some affected that, yes, most employees were informed of the decision today. The first day of E3. About as busy a day in the games press as you're ever going to get, meaning it's as good a chance they're going to get of burying the news under a flood of trailers and game announcements.

Don't do it the 38 Studios way:

How To Lay People Off in the Video Game Industry

(Image via Joystiq.)

Is that how you should do it? Nah.

Do it the PopCap way, if you've got to do it at all:

...this morning we informed our employees about a reorganization in our studios that will include a "Reduction In Force" in our North American operation – mostly in our headquarters here in Seattle – and an "exploratory consultation" to evaluate the future of our PopCap office in Dublin, Ireland.

And now in English: "Reduction In Force" means that some people are losing their jobs. "Exploratory consultation" means we're talking to our Dublin team about the future of that office and whether we can find a path to improve our profitability in Europe without having to close the operation. Today's news is something you expect periodically from a company in a fast-changing industry, but it sucks if you're one of the people losing his or her job. These people are our friends and we don't like doing this.

We've made hard decisions before, even had cuts before – at this time in North America there are about 50 people who will no longer work at PopCap. We've hired aggressively this past year and PopCap is still growing. Even with the cuts we expect to end the year with roughly the same number of people we started with.

A little context on why we're making cuts in some areas while we're investing and expanding in others: In the past year, we've seen a dramatic change in the way people play and pay for games. Free-to-play, social and mobile games have exploded in popularity. That happened fast. Surprisingly so. The change in consumer tastes requires us to reorganize our business and invest in new types of games on new platforms. It's a completely different world from when we started.

There's also an economic component to the reorganization. To stay in business, we need to manage costs, improve efficiency and maintain a profit. We've been able to invest in creative new games like Peggle and Plants vs. Zombies because we had a high profit business. That business is challenged, and if we don't adapt, we won't be able to invest in new IP. That sounds harsh – but if we don't stay in business, no more plants, zombies, jewels, frogs or worms.

One year ago, we decided to integrate PopCap with EA. I know I wouldn't choose to be anywhere else right now. EA has provided a lot of resources for us to grow and allowed us to operate as an independent studio. I've seen speculation that EA is no longer letting PopCap run independently, and that's simply not true. The founders, CEO, and executives who were in charge of PopCap still are. The decision to reorganize was 100 percent made by us, with no pressure from EA. EA has a diverse business with games on consoles, PCs and practically every other platform under the sun. We're glad to have those resources supporting us when a lot of other independent studios are struggling. In addition, some of the people affected by the reorganization may be retrained and reassigned to other jobs in the EA studios. If we didn't have EA behind us, the cuts would have been worse.

What's next? Part of making changes is to stay healthy and viable. Good companies don't wait to change until it's too late. We're growing quickly into new areas of mobile and social, and are expanding in new markets like Japan and China. And there are many more great games to come from PopCap.

While today's news is distressing in some ways, especially to those of us who've been with PopCap from the beginning, we're sincerely excited about the company's future prospects and committed to continuing to lovingly craft the very best and most broadly appealing video games in the world.

John Vechey, Co-founder

Because, hey, sometimes you've got to let people go, but you might as well try to be a human being about it.