Things already looked bleak for game peripheral maker Mad Catz Interactive Inc after its CEO and two other top staff resigned the day before the company’s financials were released, but now the future of Mad Catz seems even more uncertain, as the company has announced that it is laying off 37 percent of its workforce.

“Today, we are announcing a restructuring plan that we strongly believe will enable Mad Catz to be more competitive and increase our focus on operational, technological and commercial actions that will help us achieve our long-term vision,” newly appointed CEO Karen Mcginnis, who had served as the company’s CFO until yesterday, said in a statement.

“These changes will allow us to operate more effectively and help create an organization that is more agile, able to pursue growth and regain share in our core markets by simplifying our processes and reducing our operating costs, thus increasing our competitiveness and profitability without compromising the quality of our product offering. This realignment of our resources will also enable us to better support strategic initiatives that will make our product slate more competitive, help us gain added consumer interest and create sustainable shareholder value.”

What went wrong?

Mad Catz had already faced some turmoil last year when it missed a revenue target set by its creditor, Wells Fargo, and it appears that little has improved since then.

One of the company’s biggest deals over the last year was its partnership with Harmonix Music Systems Corp for the production of Rock Band 4. Mad Catz was responsible for the creation of Rock Band 4’s specialized game controllers, which resemble musical instruments.

Unfortunately, sales for Rock Band 4 were lower than expected, resulting in many retailers overstocking the peripherals for the game. Mcginnis noted in press release that the excess inventory led many retailers to offering promotional deals for Rock Band 4, which caused the margins on controller sales to drop.

While Mcginnis said that Mad Catz is confident about its ability to monetize its products in the future, the company’s struggles seem to be far from over.

Photo by pestoverde