Angry Birds maker Rovio is laying off 16% of its staff, admitting that the company’s headcount had swelled based on ‘assumptions of faster growth than have materialised’.
“We are an entrepreneurial company and have been exploring multiple areas. We have been building our team on assumptions of faster growth than have materialised,” wrote Hed.
This may not be good news for Rovio’s educational arm, including the Angry Birds Playground initiative that has seen the company working with the University of Helsinki to develop an educational programme based around maths, science, music and other subjects.
“It is never easy to consider changes like this, but it is better to do them sooner rather than later, when we are in a good place to reignite growth,” added Hed.
“At Rovio we live to delight our fans. This year we have more launches and news than ever. As we consider these painful measures, we keep our eye on always delighting our fans with products they love.”
As The Guardian reported earlier this week, the Angry Birds games still have 200m active players, but that’s down from 263m at the series’ peak at the end of 2012.
Rovio reported revenues of €156m (£128.4m) for its 2013 financial year, a slight increase on the €152.2m from 2012. The company’s profits halved from €55.5m in 2012 to €26.9m in 2013, as it invested in its ToonsTV animation network and the Angry Birds movie, which will be released in 2016.
Rovio added 300 staff in 2013, taking its headcount to 800 at the end of the year. The company has faced unavoidable comparisons with fellow Finns Supercell, which made $892m of revenues in 2013 from just two games with a headcount of 132 staff.
Supercell’s startling success – like that of Candy Crush Saga publisher King – came from “free to play” games that make their money from in-app purchases of virtual items.
Rovio has moved into that market too with games including Angry Birds Go!, Angry Birds Epic and Angry Birds Stella, but has yet to generate a hit as big as those rivals, even if its consumer products business – from magazines and books to sweets and clothing – is more advanced.
Hed has already announced that he will step down as Rovio’s CEO at the end of 2014, to be replaced by former Nokia marketing executive Pekka Rantala. Hed will become a board member, while chairing Rovio’s animation division.
This article was written by Stuart Dredge, for theguardian.com on Thursday 2nd October 2014 09.10 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010