Midway Confirms Recent Layoffs In SEC Filing

Publisher and developer Midway has filed a document with the SEC officially confirming that it plans to lay off staff, something it has apparently already accomplished with the reported closure of its Australian studio and imminent shuttering of its San Diego office. According to the document, which was compulsarily required to be filed: "On December 14, 2005, the Company's Board of Directors committed to a plan to reduce the Company's cost structure and increase product development synergy and efficiency. To that end the Company has instituted strategic workforce reductions that it expects will allow the Company to better leverage resources in a manner consistent with its strategy to increase the quality and size of its internal product development capabilities." The filing continues: "As such, the Company anticipates that it will reduce headcount by between 71 and 96 positions, which represents a reduction of approximately 8-11% of the Company's global workforce. The Company expects that the majority of the headcount reduction will occur by the end of 2005, with the remainder of headcount reduction planned for 2006. Despite these reductions, the Company grew its overall internal product development employee base in 2005 and intends to continue to grow its product development employee base in 2006." The document ends by revealing that Midway expects to incur pre-tax charges related to these activities in the fourth fiscal quarter 2005 of approximately $13 million. In addition, the company announced unrelated additional charges of approximately $7 million for the fourth quarter of 2005 due to inventory writedowns, bad debts, and accelerated development amortization. These facts are likely to worsen further the predicted financial year loss of $95 million for the firm.