The company says it plans to operate with a maximum of 800 staff, a reduction of 25 percent, while the board has decided to cancel 14 projects which it considers unlikely to generate an acceptable return on investment or to be lacking in quality.

SCi announced its restructuring plans after suffering an £81.4m loss from operations in the six months to December 31, 2007, compared to a loss of £17.9m in the same period in 2006.

“SCi is in need of immediate change,” said SCi CEO Phil Rogers. “Following our business review over the last six weeks, we are initiating a clear action plan based on three fundamental strands of activity: a radical change in our structure to a studio-led business, a top to bottom program of product improvement and efficiency and a considerable cost reduction plan.

“To get SCi on track we have to act rapidly and effect change quickly. We must allow the world-class people that we have within the Group to focus on strong, profitable titles which will create the value our shareholders deserve.”

The company plans to change from a centrally controlled development and publishing model to a studio-led business focusing on cornerstone products such as Tomb Raider, Hitman, Championship Manager and Deus Ex.

“We are creating a third party business unit to manage the effective creation and
delivery of exciting new games such as Just Cause 2. Third party developers will continue to be an important part of our business,” said the company.

Casual and mobile gaming will come together under a new Eidos Play brand, while production services, which include localization and QA, will be relocated from London to Montreal in order to bring staff closer to games while benefiting from Montreal's lower cost operating environment.

The company also says it will cut its annual operating costs by £14 million by the end of June 2008 at a one-off cost of £7 million.

“The Board is reviewing the working capital required for the successful implementation of the revised strategy.  This amount is not yet finalized, but it is estimated to be between £45 - 55 million, over and above the current overdraft facility of £20 million,” SCi added.

“The Board believes that value for shareholders is best achieved by raising this through the issue of new equity. The Board's preferred method of equity fund raising is through the capital markets, though discussions with potential commercial partners indicate that equity may also be forthcoming from such sources. Encouraging discussions continue with the company's lending bank regarding the extension of the current banking facilities.

“At this time the Board is not encouraging offers for the company but, in a consolidating industry, any sensible offer for the company or proposal for crystallizing value for some of the Group's IP will be considered in the context of the alternatives and benchmarked against the value the Board believes can be delivered for shareholders through the revised strategy and business plan.”