SEATTLE (AP) - A games company based out of Seattle said it would lay off 250 employees, the Seattle Times reported.
Big Fish Games told staffers in a memo on Tuesday that the move was being made from a position of “financial strength.” Company officials said that saving money was not the impetus behind the layoffs.
The memo was signed by the company’s co-presidents Andrew Pedersen and Jason Willig. It makes no mention of a Monday court ruling that granted preliminary approval for $155 million in financial settlements from two lawsuits filed against the company since 2015.
The lawsuits allege that the company’s free-to-play Big Fish Casino game violated Washington state gambling laws because it forced players to make in-app purchases in order to continue playing. When users’ spending habits became addictive, plaintiffs said, the company did nothing to cut off their purchases.
One plaintiff estimated spending more than $300,000 in the app. Online gambling is illegal in Washington.
The settlement would have Big Fish’s parent company Aristocrat pay $31 million while former owner Churchill Downs - owner of the Kentucky Derby racetrack - would pay $124 million.
The majority of the layoffs will come from the Seattle area and will affect more than a third of Big Fish’s roughly 600 employees.
The company was founded in 2002 and was one of the west coast’s largest independent gaming companies before being sold to Churchill Downs in 2014. Churchill Downs then sold Big Fish for $990 million to Australian-based Aristocrat Technologies, which operates online games.
The memo to Big Fish employees Tuesday said the severance packages that were given to laid-off employees were “above the minimum” to help support them.
“While difficult to face today, these moves reinforce a commitment to players and our mission to become a truly great games company,” the memo said.
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