Online games developer Cryptologic to cut jobs after losing $16m and chief executive

ONLINE CASINO games developer Cryptologic plans to cut part of its 200-strong workforce following poor second quarter results and the resignation of its chief executive, Brian Hadfield.

The Irish-headquartered company announced that Mr Hadfield was resigning this week at the same time that it revealed that the business lost $12 million (€9.4 million) in the second quarter of the year and almost $16 million in the first six months.

Chairman David Gavagan will step into Mr Hadfield’s shoes on an interim basis while the company works through the initial stages of a cost-saving programme and begins the search for a permanent chief executive.

Mr Gavagan is well known in Irish business. He was a founder of private equity fund Hibernia Capital Partners, which wound up activities in 2004. Earlier in his career, he worked with DCC. He is qualified as a chartered accountant.

The company intends to lay off a number of its 200 workers in a cost-cutting programme that it is implementing to counter sliding revenues and earnings.

Staff at its head office in Dublin, where it employs between 20 and 30 people are not likely to be affected.

The group has software development operations in Toronto, Minsk in Russia, Kiev in the Ukraine and in Malta, where its gambling activities are licensed.

Mr Hadfield took over the reins at Cryptologic in 2008, and refocused the business to emphasise licensing its blackjack, slot machine-style and other games to other online gaming operators rather than trying to build its own platform.

The company did deals with a number of big players, including betting exchange, Betfair, and bookmakers Paddy Power, Ladbrokes and Victor Chandler.

He originally aimed to return the company to profitability during the second half of last year, but losses continued and revenues began slipping. In the second quarter of this year, they dropped to $6.7 million from $7.6 million in the previous quarter.

Cryptologic is unlikely to make dramatic changes to its current strategy of developing games and licensing them other operators, while continuing to operate its own platform.

The company has deals with Marvel and DC Comics to use superheroes such as Spiderman and Superman in their games.

Its games have won a number of awards are are recognised within the group’s industry as being of a high standard. However, the company has had difficulty translating this to revenue and profit over the last two years.

Cryptologic moved its headquarters from Toronto to Dublin in 2007 after legislators banned internet gambling in what was then its main market, the US.