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July 29, 2008 1:37 PM

Game over for 53 Vivendi employees in Issaquah

Posted by Brier Dudley

With the success of "Guitar Hero", "World of Warcraft" and "Call of Duty", you'd think Vivendi Games wouldn't be cutting employees in its games group.

The group reported a 17.9 percent increase in sales last Thursday.

But the company just notified the state of Washington that it's permanently laying off 53 employees at its Issaquah offices. The cuts will happen Sept. 13-27.

Maybe it has something to do with Vivendi's now-complete acquistion of Activision Blizzard, which may have created some overlap.

I called Vivendi for more details, will update when I hear anything more.

UPDATE: Vivendi still hasn't called back, but I pulled up its proxy statement today that says the Activision merger will lead to consolidations and cost cutting.

It didn't say anything about Issaquah, but mentioned that one of the challenges in making it work is "reducing the costs associated with each company's operations and, in particular, reducing historic losses in the Sierra businesses."

Vivendi set up shop in Issaquah in 2006 when Sierra Online acquired Secret Lair Studios.

Other risks of the merger, disclosed in the proxy, make it clear that job cuts are part of the deal:

"The combined company may not successfully integrate the operations of Activision and Vivendi Games in a timely manner, or at all, and the combined company may not realize the anticipated benefits or synergies of the transaction to the extent, or in the timeframe, anticipated. The anticipated benefits and synergies include cost savings associated with anticipated restructurings and other operational efficiencies, greater economies of scale and revenue enhancement opportunities."

On the positive side, job growth has been strong elsewhere in the region's game industry, so hopefully the 53 people will find something else soon.

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Gadgets and games | Fun stuff I've written about lately includes Apple's iPhone, Hewlett-Packard's HDX laptop and Microsoft's Halo3. Also on the radar are new digital video boxes such as the Tivo HD and the Vudu.