THQ lays off 100, focuses wireless games on smart phones only

THQ has laid off 100 employees as a result of a decision to focus its wireless division on making games for smart phones.

The company previously made games for all sorts of cell phones. But as a result of this move, the company is closing its San Diego, Calif., U.K., and German wireless game development offices. The Universomo studio in Finland will continue to be the center of the company’s wireless game business.

This means that the Calabasas, Calif.-based company is shifting to where the action is: games for iPhones and other high-end handheld devices. The company still has about 2,000 employees. The company announced a broad restructuring in November since many of THQ’s games were disappointments during the year. With the restructuring, THQ cut several titles, laid off 250 people, and aimed at shaving $100 million in spending.

In the second fiscal quarter ended Sept. 30, the company reported revenues of $164.8 million, compared with $229.3 million in the prior year. THQ had a net loss of $115.3 million, due to a large non-cash charge. A year earlier, the company reported a net loss of $7 million.

Here is the text of the email sent by Brian Farrell, chief executive officer of THQ, to employees:

Good afternoon team,

I want to take this opportunity to update you on some important actions we are taking under the plan we announced in November to best position THQ for profitability and growth.

As part of our goal of aligning our business to focus on our most competitive product categories, we have decided to streamline our THQ Wireless operations to focus only on games for high-end handheld devices. Given today’s market environment, we believe our focus on the high-end handheld market is critical to strengthening our market position and achieving profitability.

As a result, we will be downsizing our wireless group and will be closing our San Diego, UK and Germany wireless offices. Approximately 100 employees will be affected. Our Universomo studio will continue to be the center of our wireless development business. Universomo has been recognized for product quality and we look forward to continuing to develop and publish quality games for devices such as the Apple iPhone.

I want to emphasize that closing offices is never an easy decision. However, we are confident that the actions we are taking now will strengthen our ability to drive growth and profitability in the future. I thank you for your continued focus and commitment as we reposition the company and move forward.

Brian