New York-based publisher of entertainment software GT Interactive Software Corp has projected an operating loss of $55m for its fourth quarter and cut more than one-third of its workforce, some 650 jobs. The firm said that revenues for the fourth quarter are expected to fall between $92m and $97m and a net loss for the fiscal year is also expected.
The company has blamed the loss on its failure to deliver five major games titles and costs associated with its planned corporate relocation to Los Angles. The job cuts are mainly expected to effect GT’s distribution arm. The company plans to outsource its distribution concerns, which it hopes will save up to $8m a year.
Nick Gibson, games analyst at Durlacher Research, says that GT’s problems are a reflection of games sales down on the last year’s buoyant market. He says that most major games houses are expecting flat or negative sales growth. Gibson also points out that GT is exceedingly bottom-line orientated and that the company has moved fast, cutting jobs to pacify its shareholders. In addition, GT will be announcing a new business plan at the end of this month.
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