Nascar Rivals developer Motorsport Games is laying off about 40 percent of its workforce to reduce operating expenses year-over-year.
The studio, headquartered in Miami, confirmed the news in a filing with the SEC and said it would cut around 38 jobs, mainly in the UK and Australia.
Motorsport said the restructuring program would result in costs of approximately $400,000 to $500,000, made up largely of severance and redundancy payments. The studio expects to pay the majority of these restructuring charges during the fourth quarter of the current fiscal year.
“The Company further anticipates that the implementation of the workforce reduction, including cash payments, will be substantially completed by the end of the fourth quarter of fiscal 2023,” it added. “The reduction in force is subject to legal requirements in Australia and the United Kingdom, which may extend this process beyond the fourth quarter of the 2023 financial year in some cases.”
The financial problems of motorsport
Motorsport latest financial report shows that the studio is struggling to balance its books. During the six months ended June 30, 2023, the company recorded a net loss of approximately $13.5 million, including negative operating cash flow totaling approximately $8.9 million.
At the time, Motorsport said it was “actively exploring several options” to try to remedy the situation, including equity financing, the sale of licenses or company assets, as well as reduction initiatives. costs and restructuring. It also warned that it had re-evaluated its product roadmap and would indefinitely suspend the release of any future NASCAR titles.
“In addition, the company is evaluating its ability to offer new titles under its other licenses, such as with INDYCAR and the British Touring Car Championship (the “BTCC”), which could result in further adjustments to the company’s product roadmap. the company,” the company added in its latest financial report, suggesting it may also suspend production of other racing titles.
Motorsport is the latest in an ever-growing list of studios to make layoffs in 2023. Major companies in the industry including Meta, Embracer Group, Epic, Unity, Bungie, Media Molecule, Ubisoft, Creative Assembly and more others still. eliminate jobs.
According to Video GamesLayoffsFollowing the wave of job losses in the video game industry, an estimated 6,500 people will have lost their jobs in 2023 alone.
