As reports of THQ’s financial difficulties continue, a SEC filing has revealed that CEO Brian Farrell has taken a 50% pay cut, and 240 staff members will be made redundant across the business. Meanwhile, in Melbourne, THQ’s local office is continuing to struggle.
According to the filing, Brian Farrell’s pay has been reduced drastically, and he has removed certain pay out clauses from his contract. His annual base salary has been reduced from “$718,500 to $359,250, for a one-year period beginning February 13, 2012″, and lump sum bonuses have been reduced.
It’s most likely a responsible decision considering the report also states that a “a realignment of [THQ's] organizational structure” will result in up to 240 redundancies. The majority of these redundancies have already been announced — the lay offs at THQ’s Australian office is part of that first batch — with the remainder being implemented by September 30 this year.
This “realignment” is expected to cost THQ up to $11 million, with the majority ($8 million) being allocated to “severance costs” for laid off employees.
THQ’s Melbourne office in Australia was hit with 14 redundancies, but further reports state that THQ is on the verge of losing the many of the local distribution deals it has with other major publishers.
In Australia, Capcom’s titles are distributed by THQ. According to a source within THQ, Capcom has had issues with regards to the handling of its games in Australia. The source stated that Capcom would “almost certainly shop their contract around as they weren’t happy”.
Another of THQ’s deals, with Disney, is due to expire and we’ve been informed that Disney will also most likely move on as a result of the lacklustre sales of Disney Universe locally in Australia, sales which were “far below expectations.”
The Australian THQ office has cut projected profits by 50%.
UPDATE: We’ve just had an official response from THQ Australia, who stated that the information regarding the distribution deals with Capcom and Disney was false, and that they fully expect those relationships to continue.
Martin
Thursday, February 2, 2012 at 10:04 AMU don’t draw.
Scared
Thursday, February 2, 2012 at 10:05 AMThings are not going well if the CEO is taking a pay cut, let alone a 50% pay cut.
Barry
Thursday, February 2, 2012 at 12:16 PMNo things aren’t going well but the CEO taking a major cut like this is one of the right things to do. I don’t think any other CEO would take a pay cut like this if a company was in trouble. I say good work to the CEO for doing this as that money can go into other staff’s pocket instead of his.
Hiero
Thursday, February 2, 2012 at 3:23 PMSatoru Iwata (President of Nintendo) took a 50% pay cut last year as well due to weak 3DS sales. Key staff members such as Miyamoto also took smaller pay cuts, around 20-30%, but I think Miyamoto’s base salary is actually larger than Iwata’s, if I recall correctly.
Bob
Thursday, February 2, 2012 at 12:21 PMA lot of current and former THQ employees the CEO is the problem.
Bob
Thursday, February 2, 2012 at 12:22 PMthink*
they think the CEO is the problem.
Me the dude!
Thursday, February 2, 2012 at 2:03 PMThe CEO needs to go, they need a restructure of the management and find people with a passion and experience in games!!! These guys havn’t got a clue! ;)
Thermal Ions
Friday, February 3, 2012 at 9:29 PMWhat on earth is the company board doing to let it get to this stage?
Glenn
Thursday, February 2, 2012 at 10:05 AMMan, that really sucks… THQ is one of the few publishers that actually puts out Quality games, and they have acknowledged Steamworks as the most effective DRM in the industry.
Hopefully this doesn’t have too much of an impact on future Warhammer games :(
Excelsior
Thursday, February 2, 2012 at 10:07 AMReally? They have maybe 3/4 good franchises, the rest are unprofitable junk.
Glenn
Thursday, February 2, 2012 at 10:17 AMVolition Inc – Red Faction, Saints Row
Vigil Games – Darksiders
Relic – Warhammer and Company of Heroes
As well as Metro 2033… yes most might not be as profitable as they should be, but THQ do own some pretty good franchises.
Badger
Thursday, February 2, 2012 at 10:26 AMThere are a few dormant properties as well, like de Blob, Destroy All Humans, Drawn to Life.
Alinos
Thursday, February 2, 2012 at 10:27 AMThe Red Faction franchise is essentially dead after Armageddon.
Saints Row 3. Had a decent release, Personally it’s missing a lot of content compared to what Saints Row 2 had, Unless they ramp up the DLC past the 3 planned DLC’s. They probably aren’t going to make a huge amount more money off of it. At least until Saint’s Row 4, which would be too far off to actually benefit them(especially since the last ditch attempts to save the company will be to start selling off IP)
Darksiders 2 could help them out a bit.
The Warhammer universe could actually be an expensive license. Since they have to pay Games Workshop to use the IP.
Company of Heroes is currently just the F2P MMO i believe and no other movement on that front
qbngeek
Thursday, February 2, 2012 at 10:51 AMI think you will find that THQs rights to Warhammer are bugger all. GW are psycotically strict with licencing (for very good reasons as it would have to be one of the strongest geeky brands out there) and they do not sell rights. It is more likely that GW retained full ownership of all the Warhammer games and THQ/Relic were more of a contractor (probably with a loyalty clause).
GW brands have risked being damaged in the past by writers taking artistic licence with the canon and it does not go down well with the fans at all. Now they are ridiculously strict to ensure it doesn’t happen again.
That Teemo
Thursday, February 2, 2012 at 10:13 AMWarhammer is a strong brand, if THQ goes under GW would probably look to sell the rights to the IP to another company.
Glenn
Thursday, February 2, 2012 at 10:25 AMKnowing our luck they’d sell it to EA :(
f4ction
Thursday, February 2, 2012 at 10:30 AMThey should just hire the entire Relic team and do it all inhouse, woooooooooo
Michael
Thursday, February 2, 2012 at 10:33 AMCompany of Heroes is a very strong brand actually, as is Dawn of War.
They can possibly sell off Relic, who developed both of those games. I’d be a sad panda to see Relic go if that’s what happens.
Braaains
Thursday, February 2, 2012 at 10:31 AM*sniff* *sniff*
Smell that? That’s the stench of imminent death.
HungryHendo
Thursday, February 2, 2012 at 10:35 AMI would be still quite happy with 350 thousand a year but yeah that sucks if we lose this company.
The Steeng
Thursday, February 2, 2012 at 10:39 AMOverpaid piece of shit being paid $700k to run a once-great publisher into the ground, meanwhile Australian employees are first to be punished for the poor decisions.
Badger
Thursday, February 2, 2012 at 11:52 AMNo, we weren’t even close to being the first. There were plenty of studios culled before they got around to Aus.
Snacuum
Thursday, February 2, 2012 at 10:55 AMI’m seeing a bargain buy-out and heavy restructuring and brand reconfiguring coming soon.
That Teemo
Thursday, February 2, 2012 at 11:44 AMWould seem like the perfect time for some of THQ’s competition to buy them out
Stephen
Thursday, February 2, 2012 at 11:09 AMIf it was a bank manager he’d probably give himself a bonus, scarey times for THQ I still havn’t decided how this is going to end, sink or swim?
oggob
Thursday, February 2, 2012 at 12:11 PMBasically this! I’m sure the top brass are mostly responsible for the inefficient running on the company to begin with, but certainly have to give them alittle credit for the CEO to take a pay cut and remove some of his bonuses.
As you mention, normally they will grab a bonus and piss off and leave the carcass for someone else.
If this didn’t happen, that 240 number would be alot higher.
Barry
Thursday, February 2, 2012 at 11:40 AMI will be shattered if this delays the release of a new Company of Heroes game for some time.
Michael
Thursday, February 2, 2012 at 11:44 AMThis could do more than just delay. This could totally cancel any and all possibility of another DoH, or another Dawn of War for that matter too.
Remember Relic is fully owned by THQ. If THQ actually goes down, so does Relic, unless THQ sell them off before the collapse…which is doubtful considering they are one of their most profitable and high-profile studios.
Michael
Thursday, February 2, 2012 at 11:45 AMUggh, CoH (Company of Heroes), not DoH.
Oaklawyer
Thursday, February 2, 2012 at 5:08 PMNooooo I need CoH2 :(
Fruit252
Thursday, February 2, 2012 at 2:33 PMIt’s a terrible waste of money giving someone over $700k a year… thats like 14 peoples yearly salarys, and they probably do work many times more difficult
noone
Thursday, February 2, 2012 at 4:47 PMno, that’s more like 14 inexperienced people’s yearly salaries. The annual salary of a mid-senior level game dev would be closer to 100k.
Badger
Friday, February 3, 2012 at 9:10 AMYou make me giggle.
Game dev pays bugger all. You do it for the love.
serek
Friday, February 3, 2012 at 9:35 AMWow, half that amount and you’d be more in the ballpark.
p tear griffin
Thursday, February 2, 2012 at 4:14 PMLETS HOPE THEY SELL TO EA but tis sad about the jobs
Ahtaps
Thursday, February 2, 2012 at 7:53 PMWhat the article doesn’t say is the following (From Gamasutra):
“After that year is up, THQ and Farrell will then review the base salary going forward, “provided that it shall be no lower than $718,500 per year commencing on February 13, 2013.” That amount is subject to increase, but not decrease, for years going forward, the contract said. ”
Which kind of makes it feel like he’s doing this just for appearances before asking for more money for being such a good sport.
Thermal Ions
Friday, February 3, 2012 at 9:33 PMOr he’s got a year to turn things around to the board’s satisfaction after which he’s either out on his ear or back to his previous remuneration level.
rafa
Thursday, February 2, 2012 at 8:56 PMDarksiders 2 is being developed by like 4+ different companies.. 2 of which are in Australia. If that isnt a sign that THQ is hopeless then go with all the other 100 signs.