EA belt tightening more than initially reported
12/22/2008 2:08:00 PM
EA announced additional details on their restructuring plans that was released on October 30th. The biggest details are that 10% of their workforce (1,000 people) will be laid off by March 31st, 2009. This is an increase over the 6% (600) that was announced initially in October. In addition, EA announced that they will close or consolidate nine studios, including Black Box Studio in Vancouver, which will be moved into the EA Canada located in nearby Burnaby, British Columbia. The franchises most impacted by this move are Need for Speed and Skate. EA stated at the end of the release that they will switch focus on "more hit games with higher margin opportunities". However, they also say the are committed to taking creative risks and leading in the mobile gaming industry, something that we saw a lot of this year. Let's hope they stick with their promise and don't go into a cave until the next sports franchise is due out....
EA Releases Details on Previously Announced Reduction of Facilities and Work Force
REDWOOD CITY, Calif. --(Business Wire)-- Dec 19, 2008 Electronic Arts Inc. (NASDAQ:ERTS) today announced further details on a restructuring plan which will include consolidating facilities and reducing the work force.
EA expects the restructuring plan will result in annual cost savings of approximately $120 million and restructuring charges of approximately $55-65 million over the next several quarters.
The plan is intended to reduce EA’s worldwide work force by approximately 10 percent or 1,000 people. The majority of these actions will be completed by March 31, 2009. This represents a four percent increase from the six percent reduction EA announced on October 30, 2008.
The restructuring also calls for consolidation or closure of at least nine studio and publishing locations. Among the facilities to be consolidated is the Black Box Studio facility in Vancouver, British Columbia. The Black Box development teams and associated game franchises will move to the nearby EA studio location in Burnaby, British Columbia.
EA is implementing a plan to narrow its product portfolio to focus on hit games with higher margin opportunities. The company remains committed to taking creative risks, investing in new games, leading the industry in the growing mobile and online businesses, and delivering high-quality games to consumers.