Big Fish Games axing 250 staff following social casino settlement

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Social casino operator Big Fish Games is swinging its layoff axe as the company deals with the fallout of a class action lawsuit by aggrieved players.

On Tuesday, the Seattle Times reported that the Seattle-based Big Fish had issued a memo to staff announcing that around 250 employees would be let go. The cuts are reportedly focused on local staff and represent more than one-third of the company’s overall payroll.

The memo attempted to head off concerns that the company was bleeding money by claiming that the layoff decision had been made from a position of “financial strength.” The company added that it needed “greater agility and different operating and creative capabilities” in order to “engage players more effectively today and invest more for the future.”

The memo also revealed some structural changes in the works, including moving to a single development studio model and consolidating “studio, social, and performance marketing into a single growth team.” The company also plans to “redirect more resources to efforts that directly benefit players and create business value.”

The layoffs came hot on the heels of a federal judge approving a financial settlement on Monday involving the company’s long-running legal fight with Big Fish Casino players who sued the company for what they claimed were illegal online gambling losses under Washington state law.  

In May, Australian gaming device maker Aristocrat Leisure, which acquired Big Fish from Churchill Downs Incorporated (CDI) in 2017, agreed to a $155m settlement with the disgruntled players. CDI is on the hook for $124m of that settlement, due to the aforementioned social casino activity taking place while Big Fish was still under the CDI umbrella.

Aristocrat’s digital operations contributed revenue of AU$695.5m (+18.5%) and profit of AU$197.6m (+12.4%) during the six months ending March 31. Digital accounted for roughly one-third of the company’s overall revenue.