Mad Catz to lay off 37% of staff

Fears about the situation at Rock Band 4 co-publisher Mad Catz have been confirmed with news that over a third of the company’s workforce are losing their jobs.

The changes are designed to "focus on lowering operating costs, increasing efficiencies and better aligning its workforce with the needs of the business". The restructuring will cost the company around $3m, but offer annual savings of $5m, and will be completed by Q4 2016.

For the quarter ending December Mad Catz actually reported its second highest net sales total ever, hitting $65m. That’s more than double last year’s total. However, net losses for the nine months ending December rocketed from $809k the year before to a massive $4.36m this year.

New CEO Karen McGinnis, who was handed the job yesterday after several high-level resignations, both claimed the Rock Band 4 enjoyed strong” sales while also claiming that the numbers were lower than originally forecast”. She also admitted that there was plenty of excess inventory sitting around, causing retailers to discount, and therefore reducing margins.

Soft sales of PC gaming and audio products were also blamed.

CFO David McKeon added in an investor call that Rock Band 4 performed well in October and November, but its performance stalled following Black Friday.