Reports: 38 Studios lays off entire staff

CURT SCHILLING, founder of 38 Studios LLC and a former Boston Red Sox pitcher, speaks during an interview in New York, U.S.
Posted 5/24/12

(Updated, 7:19 p.m.)

PROVIDENCE - Former Red Sox pitcher Curt Schilling's video game company has laid off its entire staff in the wake of financial difficulties, according to multiple media reports.

The Associated Press reported that 38 Studios sent employees an email notifying them of the "nonvoluntary and nondisciplinary" layoffs on Thursday.

Earlier this week, Gov. Lincoln D. Chafee announced that 38 Studios, which was lured to Providence with a state $75 million loan guarantee, had laid off an undisclosed number of workers after missing payroll last week.

At a Statehouse news briefing scheduled before news broke of the reported layoffs of close to 400 staff members in Providence and Maryland, Chafee said neither he nor anyone on his staff had been told by the company that there had been mass layoffs.

"This is the crux of the communications issue we have been having with the company," Chafee said. "It is not a good situation."

Bill Thomas, 38 Studios' chief operating officer, told Providence Business News he could not confirm that there have been layoffs.

“I can’t comment. I wish I could,” he said. “I am sorry.”

Chafee said the state has offered the company the assistance of a rapid-response team from the Department of Labor and Training to assist employees in the event of mass layoffs.

"They said they would get back to us tomorrow," said DLT Director Charles Fogarty, who attended the Statehouse briefing.

38 Studios managed to make an overdue $1.125 million payment to the state on Friday.

The $1.125 million guarantee fee, which is 1.5 percent of the outstanding loan amount, was due May 1.

Fallout from 38 Studios' apparent demise continued on Thursday.

CVS Caremark Corp. Executive Vice President Helena B. Foulkes resigned as vice chairwoman of the R.I. Economic Development Corporation board of directors.

In an afternoon e-mail statement announcing the resignation, she said it came in response to recent conversations with Chafee about his vision for the EDC’s future.

Chafee said he did not ask for her resignation but also was not surprised by it.

"We've had different philosophies on the board," he said. "We're evaluating the concept of an independent agency." He added he'd like to see the agency structured in a way that has it "more closely aligned with the governor."

He said two other board members, Dr. Tim Babineau, president and CEO of Rhode Island Hospital and The Miriam Hospital; and Dan Sullivan, Jr., president and CEO of Collette Vacations, Inc., would not be reappointed. Their two-year terms expired Feb. 1.

Last week Keith W. Stokes resigned as EDC director following 38 Studios' failure to meet the May 1 payment deadline. He said the resignation was a mutual agreement with Chafee.

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