EA to axe 1500 staff as losses deepen

EA to axe 1500 staff as losses deepen

By Rob Crossley

November 9th 2009 at 11:13PM

Publisher announces eleventh straight quarterly net loss with what is believed to be its biggest layoff operation yet

On the day that Electronics Arts announced it was fronting as much as $400 million to acquire social studio Playfish, the publisher has revealed it will cut around 1,500 jobs from its global workforce over the next five months to save an annual $100 million.

EA also suggested it will be closing a number of development studios, which – for now – have been cited by the publisher as “several facilities”.

However, various Twitter posts and LinkedIn profiles are already beginning to give an impression of where EA will be making its cuts.

EA’s new round of layoffs is thought to be the firm’s largest yet, having exceeded the 1000 job cuts announced eleven months ago.

A company statement released today read: “This action will result in the closure of several facilities and a headcount reduction of approximately 1,500 positions, of which 1,300 are included in a restructuring plan.

“The majority of these actions will be completed by March 31, 2010. This plan will result in annual cost savings of at least $100 million and restructuring charges of $130 to $150 million.”

The staff cut announcement was tied to EA’s quarterly financial report, where the struggling company posted a net loss for the eleventh straight quarter

EA told its investors today that it had suffered a net loss of $391 million for its second fiscal quarter, which widens from the $310 million loss it made a year prior.

The firm’s second quarter sales climbed to $1.15 billion, however, just edging ahead of city expectations.

However, with the firm subjected to a haemorrhaging cash flow, EA announced that it would continue to narrow its product portfolio, “to provide greater focus on titles with higher margin opportunities.”

Such product cut backs could go hand-in-hand with studio closures, of which more details are beginning to surface via social networking sites such as Twitter and LinkedIn.

Eron Garcia – whose LinkedIn profile puts him as a “senior compliance specialist for Nintendo at Electronic Arts” – wrote on his public Twitter account:

“Who just got laid off: a. Me, b. Most of my department, c. HUGE chunks of EA, d. All of the Above.”

The post has since been removed.

Meanwhile, Katherine Pitta – a purported volunteer for EA studio Mythic who claims to know some of the staff at Mythic – states on her Twitter feed:

“Mythic Entertainment, responsible for Warhammer Online, just laid off 80 people, about 40% of its employees.”

Such claims have not been confirmed by EA. Develop has approached the group for comment.

“EA remains committed to delivering high quality games for consumers and leading the industry in the growing digital direct gaming sector,” added the firm.