Chicago - Video game publisher Midway Games (NYSE: MWY) on Tuesday announced a cost-cutting plan that includes laying off 25% of its staff, suspending development on several titles, and the closure of its Austin studio. "The cost-reduction measures are vital for us to rationalize our operations and provide the resources necessary for our core properties to succeed," said Matt Booty, president and CEO of Midway. "These initiatives, along with the other steps we have taken this year, are a response to the specific challenges we are facing at Midway, many of which have been amplified by the current economic conditions."

The Wall Street Journal reported that the layoffs will affect 180 full-time positions across its Austin, Chicago and San Diego facilities.

Chicago-based Midway's shares have fallen 93% this year; the company recently hired Lazard to advise it on strategic options.

Major shareholder Sumner Redstone also recently sold his 87% stake in the company, while his daughter, Shari Redstone, resigned as chairman of Midway Games last month.

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