Heiko Hubertz has left his role as CEO as German online gaming giant Bigpoint cuts over 120 jobs.
The Hamburg company opened an office in San Francisco in 2010, to be personally overseen by Hubertz.
However, intense competition and the expense of paying employees in the second most expensive city in the U.S. has led Bigpoint to conclude that developing games in the country was not its best option.
"We have seen that developing games in the US is not really the most efficient way for us at the moment," Hubertz told GamesIndustry International.
"The games that we have developed in the last two years haven’t been that successful, and the San Francisco area and Bay Area is quite a competitive market."
The cuts effect 80 at the company’s Hamburg office and more than 40 at the San Francisco location.
Staff were informed of the decision today.
"We need space for other investments in other areas," continued Hubertz.
"We’ve doubled our revenues almost every year, and we had a budget for this year of what we wanted in terms of revenue. Unfortunately we haven’t had the strong growth we hoped, but we had hired for this growth."
The company asserts that no current projects will be effected, and the layoffs were mostly within administrative staff.
The cutbacks are due to a percieved need for greater focus to get a bigger slice of the market.
"To do that you have to be focused more and more on the business, and very careful with your investments," said Hubertz.
"For that reason we’re doing exactly what we are today to optimise our cost structure and to have the opportunity to invest in the right areas."
Hubertz will be moving to the company’s advisory board at year’s end as executive chairman, at which time his replacement will be named.
"For me it’s very important, and there are private reasons," he said.
"I wanted to leave the company after ten years of very strong growth, very exciting times, launching many products in many countries – it was really tough times and I’m a little bit exhausted. I want to relax a little bit, travel the world and think about starting a family."
Hubertz says this isn’t the first time that he has attempted to resign, but that his replacement didn’t work out.
He wishes to make it clear that his departure is in no way related to the cuts; it’s just how the timing worked out.
The cuts follow a round of 29 layoffs in August as the company began a withdrawal from the mobile sector.