Israeli mobile games company Playtika (Nasdaq: PLTK) is preparing to lay off 12%-15% of its workforce, sources close to the matter have told "Globes." About 600 employees worldwide will be dismissed including 180 in Israel.
The company greatly expanded its workforce during the Covid pandemic but has been downsizing this year, with a first round of layoffs in June.
Playtika said, "As a leading company in the industry with 4,100 employees around the world, Playtika takes seriously its commitment to be prepared for a number of business scenarios. Playtika has not made any declarations about its organizational structure."
Playtika has traditionally been a profitable, cash-rich company, which currently has $600 million in its coffers. The company has not revised its 2022 forecast downwards in any way although since the pandemic has faded, Playtika has struggled to show quarter-on-quarter growth. Year-on-year growth in the third quarter of 2022 was only 1.87%, while operational expenditure rose and net profit fell to 15%.
Moreover, the company's biggest engine of growth since it was founded has been casino games, including brands like Slotomania and House of Fun, where revenue has fallen 10%. Since the start of 2022, Playtika's share price has fallen 54%, although in premarket trading on Nasdaq today the share price is up 2.27% at $8.55, giving a market cap of $3.02 billion.
Meanwhile, investment firm Joffre Capital has announced that it is withdrawing from the deal agreed in June to buy a 25.7% stake in Playtika because of what it describes as "significant deficiencies in the Company's current governance practices", among them a conflict of interests arising from the fact that the company’s board of directors is dominated by its management, contrary to assurances made to Joffre Capital before the deal. James Lu, co-founder and managing partner of Joffre, resigned from the Playtika board at the end of November.
Published by Globes, Israel business news - en.globes.co.il - on December 8, 2022.
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