GOG lays off 10% of its workforce, cancels Fair Price Package
The lay offs
In an article from Kotaku by author Jason Schreier, a GOG.com representative has issued an official statement confirming that the company was laying off some of its staff.
“We have been rearranging certain teams since October 2018, effecting in closing around a dozen of positions last week. At the same time, since the process started we have welcomed nearly twice as many new team members, and currently hold 20 open positions.” the representative said. The statement was confirmed by one of GOG’s staff.
While the representative didn’t mention the motives behind the rearrangement, one of the laid off staff, according to Kotaku, says that the lay-offs were because of financial trouble.
“We were told it’s a financial decision,” the person told the author. “GOG’s revenue couldn’t keep up with growth, the fact that we’re dangerously close to being in the red has come up in the past few months, and the market’s move towards higher [developer] revenue shares has, or will, affect the bottom line as well. I mean, it’s just an odd situation, like things got really desperate really fast. I know that February was a really bad month, but January on the other hand was excellent. We were in the middle of a general restructuring, moving some teams around, not unprecedented. But layoffs that big have never happened before.”
Indeed, the push caused by companies such as Epic Games, which is currently boasting an 88% cut of revenues to developers compared to GOG’s 70% cut is speculated to impact GOG’s revenues, placing the company in further financial trouble.
Do the financial statements support this?
By taking a look at parent company CD Projekt’scondensed financial statement for the third quarter of 2018, beginning from page 30, one can find that GOG has a net loss of 1,739,000PLN for the period between January 1st and September 30th, 2018. This is in stark comparison to the net profit of 14,499,000PLN during the same period in 2017. The third quarter (between July 1st and August 30th) of 2018 recorded a net loss of 561,000PLN, compared to 2017’s net profit of 1,931,000PLN. From this information, there is certainly no doubt that GOG is in financial trouble, though the extent of their true severity on the store’s longevity is unclear, but there is no doubt that it may be the main motivation for the restructuring and ultimately, the lay-offs.
Cancelling the Fair Price Package program
On top of the lay offs, the Fair Price Package program will be cancelled by the 31st of March. This means that beginning from that date, you will no longer be paid back the difference between a more expensive, regionally priced game and the cheaper base North American price. The given reasoning is that GOG is no longer able to offer this program without turning a small profit. If you’re in one of the regions commonly affected by regional pricing, you have until the given date to take advantage of it.