French video game giant Ubisoft is preparing to cut up to 200 roles at its Paris headquarters as part of a major restructuring aimed at stabilising the business after a turbulent year.

The company confirmed it has entered discussions with employee representatives over a “voluntary mutual termination” process under French labour law, known as a Rupture Conventionnelle Collective. The proposal would apply only to Ubisoft International staff on French contracts and still requires union agreement and approval from French authorities.

Ubisoft employs around 1,100 people at its Paris headquarters and about 17,000 staff globally. If approved, the plan would see roughly 18% of its Paris-based workforce depart.

The proposed cuts come just days after Ubisoft unveiled a “major reset” of its operations. The company is reorganising around five autonomous “creative houses”, each responsible for a genre or group of franchises, in a bid to speed up decision-making and reduce costs.

Support studios will be shared across the business, while the role of the Paris HQ will be refocused on strategy, governance and capital allocation.

Last week, Ubisoft also confirmed it had cancelled six games, delayed seven others and closed two studios as part of a broader cost-cutting drive. The publisher is targeting a further €200 million (A$342 million) reduction in fixed costs over the next two years.

The restructuring follows a difficult period for the company. Ubisoft has struggled with delays and underperformance of several big-budget releases, including and Star Wars Outlaws, in an increasingly competitive global games market. It also breached a loan covenant last year, forcing it to delay the release of its half-year financial results.

The company said it now expects to post a loss before interest and tax of around €1 billion (A$1.75 billion), largely due to a one-off writedown of about €650 million (A$1.14 billion) linked to the overhaul.

Ubisoft’s share price fell sharply after the restructuring and guidance cut were announced, wiping more than a third off the company’s market value in a matter of days.