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Infogrames to Cut Jobs, Close Sites, Sources Say

October 01, 2002|ALEX PHAM | TIMES STAFF WRITER

Infogrames Entertainment will slash two-thirds of its staff in France in an effort to stem wider than expected losses, sources at the company said. The Lyon, France-based video game publisher also will close two of its seven European studios in the next few months, sources said.

An Infogrames spokeswoman confirmed a "restructuring in Europe, primarily in France," but declined to comment on the number of jobs affected, citing French labor laws.

The company employs 692 workers in Europe, 410 of them in France. Sources said the company will cut 280 jobs in France, plus an undetermined number elsewhere in Europe. No layoffs are expected at its U.S. operations, which employ 778.

Infogrames last week posted net losses of $78 million on $758.5 million in revenue for its fiscal year ended June 30. Losses from operations were $33 million, more than three times analyst projections of $10 million. Much of the red ink came from its European operations. Its U.S. business, Infogrames Inc., contributed $419 million in sales, an operating income of $1 million and a net loss of $10.9 million in fiscal 2002.

The U.S. branch, regarded as the healthier portion of the company, ended its fiscal year with just $6 million in cash. The company is counting on the holiday season to improve its cash flow, with releases such as "Superman" and "Unreal Tournament 2003" expected to do well.

Infogrames, which borrowed heavily to break into the U.S. market in the last three years, faces pressure from creditors to pay back two convertible bonds worth $400 million by 2005.

Shares of Infogrames' U.S. subsidiary fell 3 cents to $2.22 on Nasdaq.

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