Unfortunately, the wave of workforce reduction that is sweeping the gaming industry is continuing with layoffs announced at Nascar Rivals developer Motorsport Games.
With a Form 8-K sec filing (reported by Gamedeveloper), the company announced that it’s laying off “approximately” 38 employees.
That means that the company will lose about 40% of its workforce worldwide.
The company mentions that this is part of “additional measures to continue to bring down its year-over-year operating expense” and that the layoffs are focused primarily in Australia and the UK.
The “approximately” is likely due to the fact that the layoffs are subject to legal requirements in both countries, meaning that the process may be long and extend beyond the end of the fiscal year.
We also hear that Motorsport Games expects to pay between $0.4 to $0.5 million in severance and redundancy costs.
This happens during a continuing and particularly harsh time for the employment market in the gaming industry. Layoffs have hit several major and smaller players including Microsoft, Epic Games, Embracer Group, Bungie, Frontier, Team17, and more, with more at Cryptic Studios revealed earlier today.
Known among other things for its NASCAR games, Motorsport Games has recently announced that it has transferred the license for simulation-style console racing games within the franchise to iRacing.
This was also part of the company’s effort to reduce its operating costs, as mentioned by CEO Stephen Hood, and is likely to be tied to the reduction of workforce as the company focuses on different games.
After careful consideration, it became apparent that it is in the best interest of Motorsport Games to concentrate our resources around alternative assets and revenue growth opportunities. We believe that this is a continued shift toward quality.
This sale to iRacing, a preferred NASCAR partner, is expected to be beneficial to all parties. We believe it will allow us to rebalance our immediate cash needs, reduce our contractual and financial obligations and double-down on near term revenue generating releases already in advanced development”