Mighty Kingdom told shareholders this morning that it would reduce its workforce by 28 per cent, labelling the move as “an exceptionally challenging decision to make”.

The decision to slash staff by more than a quarter will result in annualised cost savings of $2.1 million, the company said, with the revised corporate structure to ensure “the company can continue to execute on existing projects with key partners whilst providing flexibility to build and scale as new opportunities are secured”.

Mighty Kingdom added that by “ensuring the company reaches profitability as targeted, it allows for the protection of existing roles, with this initiative as much about saving those jobs as it is about reducing our workforce”.

Newly appointed Mighty Kingdom CEO David Yin said the decision was “difficult but one we have been forced to make to ensure the future sustainability of the company” which was founded in 2010 and, aided by $2 million of state government funding, established a games development hub in the CBD in 2017.

“We understand the impact these decisions have on the individuals impacted and we will be looking to support them as best as possible,” said Yin, who was named CEO in March to helm a new vision for the firm.

“We need to be diligent in making the necessary decisions to deploy our existing capital effectively to grow the company.

“I want to take the opportunity to thank all staff who have worked through a very difficult period, and I look forward to a more sustainable future.”

InDaily approached Mighty Kingdom to confirm how many staff would be affected under the 28 per cent workforce reduction plan and was told that the exact number of people to be laid off was being finalised through the redundancy process.

In March, the company unveiled its future plans, supported by a $6.2 million capital raise.

The new strategic direction will see the company expand into “higher-value gaming products” and establish an AI Gaming Lab.

The firm also appointed Yin at the time. He is is Mighty Kingdom’s third new CEO since January 2023, when founder Philip Mayes stepped down from the top job after more than 12 years following a series of “unacceptable” financial results.

At the time, Mighty Kingdom foreshadowed a business restructure would be implemented including plans to right-size the firm to “demonstrate financial independence and operating stability” and to “achieve gaming profitability break-even by H1 FY25”.

The layoffs at Mighty Kingdom also follow widespread job losses across the global video game sector.

More than 10,000 workers in the industry were laid off in 2023, up from 8500 in 2022. The trend continued into 2024, with thousands more jobs lost at major companies like Microsoft which cut 1900 workers in January at subsidiaries Activision Blizzard and Xbox, and Sony which laid off 900 people globally across its studios in February.

Shares in Mighty Kingdom are steady at the time of writing.