Casino content developer NetEnt has announced 120 full-time redundancies in Stockholm and Malta, as it finalises its acquisition of slot developer Red Tiger.

NetEnt, which acquired Red Tiger in September 2019, says the redundancies are part of its strategy to improve its business, strengthen competitiveness and increase value creation.

The redundancies are reportedly going to hit the Stockholm-based games production and tech teams, and the marketing teams in both Sweden and Malta. Some positions are also going to be relocated to offices in Malta and India.

The company estimates the restructuring will save it somewhere in the region of SEK150m (approx. €13.74m) on a cash-flow basis, from H2 2020. If this pans out, it will mean the originally predicted annual synergies will have increased from SEK150m to SEK250m. Costs of the restructuring are expected to come in at around SEK25m.

Commenting on the news CEO of NetEnt, Therese Hillman, said:

“We are now entering the next phase of the integration with Red Tiger, whose sellers are also becoming shareholders of NetEnt.

“The integration will unleash the full potential of our shared capabilities, create significant efficiency gains in games development and strengthen our position as the market leader in online casino.”

NetEnt has also confirmed it will be paying the £23m GBP earnout consideration, originally scheduled for 2022, early through a directed issue of new B-shares in the second quarter of 2020, with the rest paid as cash in the second quarter of 2021.

According to NetEnt, it has decided to bring the earnout forward, and complete full integration of Red Tiger, because the slot developer’s performance “has exceeded the company’s forecasts by a wide margin and full integration will offer the potential to extract synergy increases for NetEnt, both in terms of revenue and costs.”

AYO.NEWS says:

Ouch, these redundancies couldn’t have come at a worse time for those involved. Despite the online casino industry not suffering from the COVID-19 crisis yet, the unprecedented global economic crash already starting will likely make jobhunting a nightmare. We wish everyone affected the best of luck.

Staying with Red Tiger, earlier this week we reported the developer had expanded its Swedish footprint, going live with Svenska Spel Sport and Casino.

AYO.NEWS says features the opinion of the author and does not necessarily reflect the views of Pentagon Digital Limited.

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