THQ to lay off 240 workers, dock CEO pay
THQ Inc. will lay off 240 workers, or more than 17% of its workforce, in the coming months as part of a previously announced restructuring plan to remain viable by radically scaling back the Agoura Hills game publisher's operations.
The company also temporarily halved the base annual salary of its chief executive, Brian Farrell, to $359,250, for one year starting Feb. 13. Additionally, it reduced Farrell's potential termination pay from three times the amount of his highest annual bonus to one, should he resign or be fired without cause, according to documents THQ filed Wednesday with the Securities and Exchange Commission.
The beleaguered game company, once one of the industry's top three players, fell prey to a string of poorly performing releases in recent years as well as a shift among consumers away from the types of console-based children's games on which THQ excelled to free or inexpensive games played on Apple Inc.'s iPhones and iPads.
Consequently, THQ in December announced it would exit the kids console games market and focus instead on hard-core games, such as Saints Row: The Third and its fighting games, based on its licenses with the Ultimate Fighting Championship and WWE Inc.
As a result of the layoffs, THQ said it expects to take an $11-million charge for severance costs, much of it in the quarter ending March 31. The company expects to report its December quarter financial results Thursday afternoon after the stock market closes.
THQ's shares, which fell below $1 on Dec. 8, gained 5 cents to 72 cents a share Wednesday. The company on Tuesday disclosed that it had received a delisting notice from the SEC because its stock has traded below the $1 minimum listing price for 30 consecutive days. THQ has until July 23 to pull its shares above the $1 threshold, according to SEC rules.
— Alex Pham
Photo: THQ Chief Executive Brian Farrell. Credit: Anne Cusack / Los Angeles Times.