EA fires "hundreds" :(

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Electronic Arts has taken the ax to hundreds of employees at locations in Burnaby, Orlando and San Francisco today, according to chatter from former EA employees, issuing layoffs the same day it confirms a buyout of social gaming publisher Playfish.

Included in this are the Tiburon studies which produce the EA Sports products. Odd since I always thought they were rock solid.

http://kotaku.com/5400594/rumor-ea-g...

I guess that must make Playfish ever so happy...

Always before the quarterly earnings reports, to look good to stockholders. Seriously, who is fooled by this? Do stockholders think that positive numbers gotten by cutting staff really show actual gain?

"Oh, crap! We just bought a company for 285 million dollars but that wasn't in the budget! What do we do!?"

"Eh, just lay off 285 million dollars worth of employee expenditures. That should even things out."

"Brilliant! Goodbye you hundreds of employees. You and your stinking overpriced benefits!"

this is turrible news.

I originally mis-read the title of this thread in a way that made me think that EA was filing a trademark for "hundreds" and that bear was unhappy with that.

Now that i clicked through i'm depressed...

That does suck. On the upside, if any of them can sing, Aerosmith is looking for a new singer to tour with.

It's just EA Sports. How many guys does it take to increment the title art year by 1 number?

NSMike wrote:

Always before the quarterly earnings reports, to look good to stockholders. Seriously, who is fooled by this? Do stockholders think that positive numbers gotten by cutting staff really show actual gain?

Given the DOW is above 10,000 again and realistically most companies have simply been reducing expenses (aka layoffs..freezing spending) in the face of dropping revenues I would say YES!

Theres a few rare companies experiencing actual growth... the majority are hurting big time.

It's clear that EA is banking heavily on social gaming to be the next really big thing and start driving growth there...

/shrug

who knows maybe this spells the beginning of the end of the big publisher model and we'll see less "big" title games and the next Madden Football is on Facebook first.

LobsterMobster wrote:

It's just EA Sports. How many guys does it take to increment the title art year by 1 number?

Is that a philosophical question?

EA Canada is located in Burnaby, British Columbia. If I recall correctly, Black Box was dissolved and became part of EA Canada.

I understand the need for lay-offs. Don't like, but understand it. I just don't understand laying off hundreds of workers the day you announce a 300 million dollar acquisition.

Is Electronic Arts getting rid of their sports franchises? Strange things are afoot at the Circle K.

I'm curious to know if these are in fact "lay offs" or are simple non-renewals of contracts. A large part of the game industry workforce is employed under contract, especially at the big companies like EA and Activision, and after the overtime debacle EA went through a few years ago, they solidified that employment method. So is this in fact a lay off, wherein employees' contracts have yet to expire but they were let go anyway, or has EA simply not renewed contracts? It is not uncommon for the big companies to simply not renew contracts after work on a specific game has been completed. This can also be seen as one of many reasons for the uprising of start-ups and indie devs, especially for Facebook and the iPhone: they were let go or contracts not renewed, as the big guys are struggling to stay afloat and restructure their pipelines for more efficiency, and as the industry workforce is inundated at the moment, these folks have started their own businesses to keep in the industry and stay afloat themselves. Suffice it to say, the industry's workforce is becoming largely nomadic, going from one long-term-but-temporary contract to another. Save for the smaller developers who, it would seem, can maintain that older business model (of keeping employees rather than contractors) as it generally works for developers of a certain size, for the most part.

Other places have reported it being more MMO related with lots of folks from EA Mythic being let go.

TexasRay wrote:

Other places have reported it being more MMO related with lots of folks from EA Mythic being let go.

That would make sense... but wasn't Mythic kind of loaned out to BioWare for TOR? Or am I completely misremembering that?

To turn in a profit on a AAA title these days, sales either have to be spectacular or your costs need to be extremely low. Increasing the quality of their games hasn't helped with the former, so they're working on the latter.

From the EA press release on Yahoo Finance:

Cost Reduction Plan

EA has announced a plan 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 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.

Linky

NSMike wrote:

Always before the quarterly earnings reports, to look good to stockholders. Seriously, who is fooled by this? Do stockholders think that positive numbers gotten by cutting staff really show actual gain?

That answer is yes. The stockholders don't care how the gains were acquired, just that they were, and most of them probably don't look at anything other than the quarterly final reports to determine whether to buy or sell.

Definitely sad times for all those employees though. I hope they find something else soon.

I have very dim views of EA's ability to manage Playfish in a meaningful and value creating aspect. I don't have faith in their corporate culture to really understand what needs to be done to drive their brands in a fashion that will appeal to the demographic that plays social games.

I suspect what will happen is a dilution over time of Playfish's core leadership and an eventual failure on EA's part to realize any strategic opportunities with the Playfish acquisition.

Senior management at EA with any sort of visionary and "thinking out the box" ability is sorely lacking... at worst its "group think" at its "best"

Cost Reduction Plan

EA has announced a plan 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 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.

Translation: Fine, Activision. Your model wins.

Good, I hope a small developer or publisher grows from the ashes to sting EA in it's cold heart.(Yes, EA does have a heart, and we must stab it)

LobsterMobster wrote:

It's just EA Sports. How many guys does it take to increment the title art year by 1 number?

especially vs how much the exclusive NFL rights is costing them year over year... I'd be curious if EA has any ability to opt out of the contract or are they stuck with it until it comes up for renewal?

Lucky Wilbury wrote:

That does suck. On the upside, if any of them can sing, Aerosmith is looking for a new singer to tour with.

wait, what?

---edit----

ok, read it. go old timers!

TheGameguru wrote:
LobsterMobster wrote:

It's just EA Sports. How many guys does it take to increment the title art year by 1 number?

especially vs how much the exclusive NFL rights is costing them year over year... I'd be curious if EA has any ability to opt out of the contract or are they stuck with it until it comes up for renewal?

With how much better the NBA 2k sports games are I really wish this contract would end. The last NFL 2k game was excellent and cheaper than Madden. It makes me feel a little better that they have to pay a large amount to keep it at least. I hope the cost to keep the exclusive contract goes up every year.

I have, and still occasionally play, NFL2k5. The one with T.O. on the cover that sold NEW at LAUNCH for $20. Great game. Still holds up. And really it's only a higher-resolution and roster update from competing with this year's Madden AS-IS.

There's a stiff learning curve just because most gamers have Madden Muscle Memory, but beyond that, even the presentation is slightly superior to Madden '10, IMHO.

Exclusive major league licenses are a turrible idea.

Elysium wrote:
Cost Reduction Plan

EA has announced a plan 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 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.

Translation: Fine, Activision. Your model wins.

And so ends the 'New' EA...

Elysium wrote:
Cost Reduction Plan

EA has announced a plan 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 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.

Translation: Fine, Activision. Your model wins.

Didn't Chris Remo write a song about this here?.

As a related aside, I was informed last week that WAR went on "Maintenance Mode" recently, which is never a good sign. It means that there is no new content generated, only fixes. Still not sure if they were hit.

It looks like the great Jeff Green didn't get the axe. He's practically the only ray of sunshine left at EA.

MacBrave wrote:

It looks like the great Jeff Green didn't get the axe. He's practically the only ray of sunshine left at EA.

I'll admit to checking his twitter feed when i first heard the news.

Sephirotic wrote:

As a related aside, I was informed last week that WAR went on "Maintenance Mode" recently, which is never a good sign. It means that there is no new content generated, only fixes. Still not sure if they were hit.

According to a Mythic volunteer 80 employees were laid off at Mythic, about 40% of their staff.

Whispers in your ear: Psst. The economy sucks. People are being let go all over. Hell, Thursday my co-worker and I found out we had Friday for him to transfer knowledge over to me and that would be his last day billing the government. Sorry, Sgt. Hatred, hate to see you go but taking care of these boys is now a one guy job.

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