17 April 2023
Ten Square Games S.A. with its headquarters in Wroclaw (“The Management Board”, “Company”) informs that on April 17, 2023 it has decided to focus on the development of the Group’s main products – Fishing Clash, Hunting Clash and Wings of Heroes, and to adjust the employment structure to the current market situation and plans of the Company. The Management Board of Company sees the greatest development potential of the Company in the hobby and simulation niche.
Due to the above the Company has decided to suspend further development works on the Undead Clash and Fishing Masters projects. The Fishing Masters project was developed in the idle RPG segment, which is outside the main area of the Company’s activity, hence the decision to terminate it. The Undead Clash project was an attempt to go beyond the niche in which the Company specializes.
Due to the closure of the Undead Clash and Fishing Masters projects, the Management Board decided to fully write off the capitalized costs related to the production of both games. As of March 31, 2023, this value amounted to PLN 14.3 million for Undead Clash and PLN 11.4 million for Fishing Masters. The final amount of the write-off of costs related to the development of games will be disclosed in the report for the first half of 2023, after calculating the amount of severance pay for dismissed persons based on the final conditions of dismissal. The sum of both write-downs will burden the results of the Ten Square Games Group in the second quarter of 2023.
Following the decision to focus on the strategic priorities and due to the weak economic situation and its impact on the mobile games market, the Company has decided to adjust the structure of operating costs, including the employment cost to the current conditions. The scaling down of employment will have a limited impact on the core production teams. The Management Board plans to reduce employment by about 120 people, which constitutes about 25% of people working for the Company, including about 50 people on the basis of employment contracts. Due to this reason on April 17, 2023, in accordance with the provisions of the Act of March 13, 2003, on special principles of terminating employment relationships with employees for reasons not related to employees (Journal of Laws of 2003, No. 90, item 844), the Management Board of Ten Square Games adopted a resolution on the intention to carry out group lay-offs and to start the consultation procedure on the group lay-offs. The Company plans to carry out the process of group lay-offs till the end of April 2023.
The Management Board will invite representatives of the Company’s employees council to enter into consultations on the above matter and has already notified the competent labor office of the intention to carry out group lay-offs in the Company.
The Company will carry out changes in the organizational structure with care for employees, offering them a number of protective and supporting measures.
The purpose of the introduced changes is to focus the Company’s operations on the proven products and to optimize its cost structure. In the current, unstable market situation, these activities guarantee the Company the ability to adapt to changes faster, financial security and funds for future development based on specialization in the simulation and hobby games segment.
The Company will publish consecutive current report on group lay-offs after the completion of the legally required consultations with employee representatives. The Company will also provide information on the estimated amount of the provision related to group lay-offs, which will be fully charged to the Company’s results in the second quarter of 2023. The final cost related to the costs of group layoffs will be disclosed in the financial statements for the first half of 2023.