EA Cutting 1500 Jobs To Reduce Costs

Lending credence to the rumours of massive layoffs, EA details a "cost reduction plan" in its second-quarter financial results press release that will result in the termination of 1500 employees.

The "Cost Reduction Plan" detailed in the EA release involves the closure of several facilities and a huge reduction in workforce in order to "narrow its product portfolio to provide greater focus on titles with higher margin opportunities".

"This action will result in the closure of several facilities and a headcount reduction of approximately 1500 positions, of which 1300 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 $US100 million and restructuring charges of $US130 to $US150 million."

News of the reductions comes in the same press release that reports record non-GAAP revenue for the second quarter, with $US1.147 billion up 2 per cent from the same time last year, surpassing street expectations.

The release also mentions EA's $US300 million acquisition of social-network games developer Playfish, which we reported on earlier today. One could assume this means that Facebook games have "higher margin opportunities".

The release did not name which facilities would be seeing cuts, though rumours indicate that EA Tiburon, Black Box, Redwood Shores and Mythic are among those seeing layoffs today.


Comments

    Well... great news if you're into indy start-ups.

    I think a far more effective idea would have been to lay off most of management: if they had been doing their job properly, this wouldn't have to happen...

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