Angry Birds developer Rovio has announced that they will laying off 130 members their staff. The reason given for the cut is that prior hiring decisions were made based on assumed revenue that never materialized. Along with this, CEO Mikael Hed has said that the company plan to simplify their business to focus on their main business lines: games, media, and consumer products.
In a blog post he announced:
We are an entrepreneurial company and have been exploring multiple areas. We have been building our team on assumptions of faster growth than have materialized. As a result, we announced today that we plan to simplify our organization around our three key businesses with the highest growth potential: games, media, and consumer products. Unfortunately, we also need to consider possible employee reductions of a maximum of 130 people in Finland (approximately 16% of workforce).It is never easy to consider changes like this, but it is better to do them sooner rather than later, when we are in a good place to reignite growth.
In recent years, Rovio has been trying to diversify its income streams by starting initiatives such as the Angry Birds Playground, and trying to launch other franchises unrelated to Angry Birds. Tiny Thief is a good example of one of those new IP’s that failed to catch on.
Rovio are not the first developer to taste success with a mega hit, and then be forced to scale back as they failed to replicate that success. Companies such as Zynga have also faced similar challenges. However, Rovio seemed to be one of the most successful of the group, and this move raises questions as to be viability of a business model supported exclusively by mobile gaming.
We wish all those affected by the layoffs good luck in finding employment as quickly as possible.
