Mad Catz cuts 37% of workforce as part of restructuring plan

PC/video game game accessory vendor and publisher Mad Catz has adopted a restructuring plan after making a $4.357 million loss for the nine months ending December 31st 2015.

The firm made an $809,000 loss in 2014, and attributed the loss this time around largely to poor sales of the Rock Band 4 game.

The company’s Board of Directors have approved a restructuring plan focused on "lowering operating costs, increasing efficiencies and better aligning its workforce with the needs of the business". 

Mad Catz is cutting around 37 per cent of its total workforce as part of the restructure. It will cost the business around $3 million but the firm hopes it will save more than $5 million annually from Q1 2017.

The news comes after Mad Catz’ previous CEO and other senior execs resigned, days before the earnings report was published. 

Karen McGinnis, the new president and CEO of Mad Catz, said: "Today, we are announcing a restructuring plan that we strongly believe will enable Mad Catz to be more competitive and increase our focus on operational, technological and commercial actions that will help us achieve our long-term vision.

"These changes will allow us to operate more effectively and help create an organization that is more agile, able to pursue growth and regain share in our core markets by simplifying our processes and reducing our operating costs, thus increasing our competitiveness and profitability without compromising the quality of our product offering. 

“In closing, I’d like to recognize the tremendous value that Thomas, Darren and Whitney have brought to Mad Catz during their tenure, thank them for their many contributions throughout the years and wish them the very best.”

Management changes include the departure of Chairman of the Board Thomas Brown, President and CEO Darren Richardson, and SVP Business Affairs, General Counsel and Secretary Whitney Peterson.

In terms of appointments, John Nyholt is the new Chairman of the Board; Karen McGinnis is President, CEO and member of the Board of Directors, David McKeon is CFO, Tyson Marshall is General Counsel and Secretary, and Andrew Young is CTO.

Despite the losses, Mad Catz actually made $65 million in net sales during its financial Q4 2015 – its second highest net sales amount.

McGinnis added: “Our quarterly net sales were the second highest in the Company’s history reflecting strong Rock Band 4 sales, which were partially offset by continuing softness in sales of our audio and PC gaming products.

"However, Rock Band sell-through was lower than originally forecast resulting in higher inventory balances as well as lower margins due to increased promotional activity with retailers. Looking ahead, we are confident in our ability to further monetize our diverse range of products and are focused on updating and improving many of our product offerings to better leverage the opportunities we see ahead.”

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