FILE PHOTO: Boxes with CD Projekt's game Cyberpunk 2077 are displayed in Warsaw, Poland, Dec. 14, 2020. REUTERS/Kacper Pempel/File Photo/File Photo
GDANSK (Reuters) - Poland's biggest video games producer CD Projekt said on Wednesday it plans to lay off about 9% of personnel in its CD Projekt RED development studio, maker of Cyberpunk 2077 and "The Witcher" saga.
"There is no easy way to say this, but today we are overstaffed. We have talented people onboard ... based on our current and expected project needs - we already know we don't have other opportunities for them in the next year," CEO Adam Kicinski was cited as saying in a statement to media.
Around 100 people will leave the company in a reduction process that is planned to conclude in the first quarter of next year.
J.P. Morgan called the move "understandable" but added that the "timing could be better".
"To us this decision appears reasonable in the context of strong wage inflation for developers and an expected drop in activity post the release of Phantom Liberty", said the note.
Phantom Liberty is the first and only expansion to company's Cyberpunk 2077 which is due to premier in late September.
The game-maker, also known for "The Witcher" saga, expects that provision created for costs related to redundancies will amount to about 4.5 million zlotys ($1.13 million) and will impact its third-quarter financial results.
J.P. Morgan argued in its note that while the earnings from Cyberpunk's installment will mask the negative impact of severance costs in the third quarter, the investors could be concerned with the decision to make such a reshuffle two months ahead of the "most important release from the company since 2020"
The company's stock, which plummeted more than 2.8% on the news, was down 0.7% at 1013 GMT.
The news of redundancies within Poland's most well-known game studio came after two companies from the country's gaming sector, Ten Square Games and Huuuuge, announced they too would cut jobs.
($1 = 3.9973 zlotys)
(Reporting by Mateusz Rabiega; editing by Louise Heavens, Jason Neely and Conor Humphries)
