Glu Mobile announced that it is reducing headcount and operating expenses across its global organization. As a result of these and previous actions, the Company will reduce total annualized non-GAAP operating expenses by approximately $13 million, or 19 percent from its second quarter 2008 levels. When these actions are completed and the benefits are fully realized beginning in the first quarter of 2009, total non-GAAP operating expenses in 2009 are expected to be approximately $57 million.
“These decisions are difficult but necessary given the increasing economic headwinds facing our industry and the softening in consumer spending,” said Greg Ballard, chief executive officer. “By realigning our operations and resources worldwide, we are able to improve our financial performance in the near term while continuing to invest in key growth opportunities in the mobile games industry, especially surrounding high-end handsets and new platforms such as iPhone, Android and N-Gage. In addition, I have asked the Board to reduce my salary by 25% as part of our cost reduction efforts until the Company is demonstrating consistent progress toward our long-term goals.”
“This reduction in headcount and other operating expenses continues our focus on expense controls that began late in the second quarter of 2008 across all areas of our business to better position the Company’s financial foundation and support our growth initiatives,” said Eric R. Ludwig, senior vice president and chief financial officer. “These actions will improve our liquidity in 2009, and we continue to explore other avenues to improve our available cash and credit positions.”
The Company currently estimates that, in connection with the workforce reduction, it will incur pre-tax restructuring charges in the fourth quarter of 2008 related to estimated severance costs in the range of approximately $625,000 to $675,000. Substantially all of these charges will result in future cash expenditures, of which the Company believes approximately $230,000 will be paid in the fourth quarter of 2008 and the remainder will be paid in the first quarter of 2009. Additionally, the Company expects to record a pre-tax, non-cash facility closure charge in the range of approximately $700,000 to $800,000 in the fourth quarter of 2008.
About Glu
Glu is a leading global publisher of mobile games. Its portfolio of top-rated games includes original titles Super K.O. Boxing!, Stranded and Brain Genius, and titles based on major brands from partners including Atari, Activision, Konami, Harrah’s, Hasbro, Warner Bros., Microsoft, PlayFirst, PopCap Games, SEGA and Sony. Founded in 2001, Glu is based in San Mateo, Calif. and has offices in London, France, Germany, Spain, Italy, Sweden, Poland, Russia, China, Brazil, Chile, Canada and Mexico.
For more information, please visit www.glu.com
About Wireless Federation
Wireless Federation is an industry research conglomerate headquartered in London, United Kingdom. The mandate of the Wireless Federation is to provide its members and customers industry knowledge that can further enhance their understanding of the wireless industry. Wireless Federation conducts bespoke research and produces boxed reports in collabaration with Industry Bodies, Telecom Operators for Issues that revolve around ARPU, CHURN and Loyalty.
They have been associated with more than 225 mobile operators globally to set their Pricing/ Tariff Strategies, Go-To-Market Strategies for Mobile Advertising, Mobile Payments, Cutting VAS among others amongst 59 countries globally.
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