(Yicai) July 23 -- Perfect World’s stock price fell after Chief Executive Officer Xiao Hong and co-CEO Lu Xiaoyin resigned following a first-half loss and mass staff layoffs at the Chinese media and video games company.

Perfect World [SHE: 002624] ended down 4.7 percent at CNY7.49 (USD1.03) a share today. The benchmark Shenzhen Component Index dropped almost 3 percent. The stock is down 37 percent since the end of last year.

Xiao and Lu resigned their leadership roles because of “adjustments in work arrangements” and will continue as directors of Perfect World, the Beijing-based firm announced yesterday. Senior Vice President Gu Liming has stepped in as the new CEO.

On June 25, The Paper cited a source at Perfect World as saying that the firm had launched mass redundancies and would let go employees at its Beijing, Shanghai, and Chengdu offices and implement related strategy adjustments. According to other media reports, Perfect World laid off more than 1,000 staff at the end of last month.

Some of Perfect World's products did not do as well as expected, so it has optimized the allocation of resources to focus on core projects and has made the necessary personnel changes, it told Yicai previously, adding that no effort is being spared to address the negative effects of those adjustments.

Perfect World has said it expects to report a net loss of about CNY160 million to CNY200 million (USD22 million to USD27.5 million) for the first six months of this year, compared with a net profit of CNY380 million a year earlier.

Xiao joined Perfect World in 2008 and was also senior VP and chief operating officer, while Lu came onboard in 2004 and also served as senior VP, chief creative officer, and director. Xiao held about 284,000 shares and Lu around 64,000 in the company as of yesterday.

Since 2013, Gu has also been president of Perfect World's e-game business in addition to his role as VP and senior VP, according to the company. He previously served as a senior director of research and development at Microsoft.

Editor: Martin Kadiev