EA Reducing Work Force By 1,000, Closing 9 Locations

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EA has revealed further details on its restructuring plans, which will see the publisher cutting approximately 1,000 jobs and closing or consolidation of nine studio and publishing locations, including Black Box Studio.


The workforce reduction portion of the program is actually an extension on the 6% reduction announced back in October, increasing it to a 10% reduction. Terminations of the 1,000 employees is expected to be completed by March 31st, 2009. On top of the terminations, nine studio and publishing locations will be either closed or consolidated with other facilities, with Black Box Studio in Vancouver, British Columbia being merged with the EA studio in Burnaby, BC.

Along with narrowing their games portfolio, these measures are expected to save the company $120 million annually, while costing them $55-65 million in restructuring charges over the next few quarters.

Not good news for employees, but I suppose it beats coming to work to find you've been locked out.


EA Releases Details on Previously Announced Reduction of Facilities and Work Force

REDWOOD CITY, Calif.—(BUSINESS WIRE)—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.


Darth Tigris

I won't blame underperforming new IP's like Mirror's Edge and Dead Space (both garnered decent reviews and a lot of consumer discussion). I'll blame EA for releasing new IP's during a particularly risky time of year. Those games release during a less crowded time of year and they may do Army of Two numbers (new IP released during March).

Still, I saw this coming within the industry months ago when the economy started really showing its problems. Publishers have to get away from loading up the fall with titles. This is about survival.