KLab reduced its workforce to 340 employees and cut office space by over 40% after posting three consecutive years of losses, the Tokyo-based mobile game developer said in its Q3 earnings presentation.
The company eliminated approximately 100 positions through voluntary redundancy by June 30, following earlier attempts to reduce outsourcing costs and executive compensation. President Tetsuya Sanada described the restructuring as essential for “breaking through the current situation and securing profitability.”
The developer relocated its Roppongi Hills headquarters on October 27, trimming floor space to match reduced hybrid work requirements. KLab suspended development on EA SPORTS FC TACTICAL while pushing Dragon Quest Smash Grow and My Hero Academia titles to 2026 releases.
To reduce mobile game dependence, KLab launched two ventures targeting early profitability. The company established Yumekairo Production, an AI idol agency creating virtual talent for music and animation projects. It also entered GPU cloud services through an unusual model where customers purchase servers qualifying for Japan’s SME tax benefits, while KLab operates the infrastructure and collects service revenue.
The strategy aims to build recurring income streams without capital investment, though KLab offered no revenue projections for either business. The company’s market capitalization stood at $53.6 million as of August, reflecting investor skepticism about the turnaround plan.
