Playtika, the Israeli tech company that made its name with through a series of wildly successful online gambling and gaming titles with hundreds of millions of players, is leveling the latest swing of the layoffs pendulum. The company today has confirmed that it is laying of 15% of its staff. Playtika currently employs 4,100, so the redundancies will impact 615 people across the company’s global footprint in Europe, Israel and the U.S.
We understand that alongside this the company — which publishes titles like ‘Best Fiends’ — is shutting down three games altogether, ‘MergeStories,’ ‘DiceLife’ and ‘Ghost Detective’ as it seeks to rationalize costs across the board. We also understand that the company is also going to offer alternative roles to a proportion of employees impacted by the cuts.
”Playtika’s success is rooted in our agility, efficiency, creativity and obsession with delivering the most fun forms of mobile entertainment to our players,” CEO Robert Antokol told in an email. “We consistently evaluate our strategic plans with attention to many factors, including the economic environment. We believe the structure announced today further leverages our core strengths of delivering superior in-game experiences and scaling mobile games to global franchises in continuation of growth. Saying goodbye to talented colleagues and friends is difficult. They will always be part of Playtika’s rich history and a foundation to our bright future as we build on our reputation as a technology and entertainment powerhouse.”
The layoffs have been the subject of rumors since last week in the Israeli press — although the actual figures are higher than the 500 that were getting reported.
Playtika — publicly traded on Nasdaq — has been facing an especially tough year in what has been a hard time for the tech sector overall.
The company was one of the wave of businesses that went public last year, riding on the back of a huge surge in usage among pandemic consumers cooped up at home and staying out of in-person social situations.
In its IPO in June 2021, it debuted with a per-share price of $27 and a valuation of over $11 billion to raise nearly $1.9 billion, before climbing to a market cap of over $14 billion in its first day of trading.
Those figures have seen massive drops. Currently, its market cap (pre-market open on December 12) stands at $3.1 billion, with stock priced at $8.61/share as of market close on Friday.
The company also missed on earnings estimates in the last quarter. Although third-quarter revenues climbed slightly to $647.8 million versus $635.9 million in the same quarter a year ago, net income dropped to $68.2 million versus $80.5 million in Q3 2021.
And last week, one of its shareholders, Joffre Capital, pulled out of a deal to take a majority stake in the company after disputes over governance. Although this wasn’t cited in the memo that we have seen sent to employees, that inevitably has had an impact on how the company is running its finances going forward. It’s not game over for the company but the news underscores the bigger issues not just facing the tech sector, which has seen hundreds of thousands of layoffs, but the gaming sector in particular.
More to come.
