Electronic Arts slashes 1,500 jobs


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Electronic Arts today said it will cut 1,500 jobs by the end of March, or more than 16% of its workforce, the vast majority of them through a restructuring plan aimed at saving the company $100 million a year.

The video game publisher announced the cost cuts even as it proposed to pay as much as $400 million to acquire Playfish, a London-based developer of free-to-play games for social networks such as Facebook and Bebo.


“We are making tough calls to cut costs in targeted areas and investing more in our biggest games and digital businesses,” EA Chief Executive John Riccitiello said in a statement.

Though EA did not release details of where the layoffs would occur, EA Chief Financial Officer Eric Brown said research and development would be hardest hit, since that represents the bulk of the company’s employee base. Even studios with established game franchises will be hit. EA’s Tiburon Studio in Florida, which makes the Madden NFL games, will see 51 jobs go, or 8.5% of the studio’s roughly 600 workers, according to the Orlando Sentinel.

The dual moves, one aimed at trimming expenses and the other at boosting EA’s future cash flow, were announced amid a report that its quarterly revenue was up 2% on a non-GAAP basis to $1.1 billion during the second quarter ended Sept. 30. Net income of $19 million was up from $20 million loss a year earlier.

On a GAAP basis, which defers a portion of revenue for games that can be played online, EA’s sales fell 13.5% to $788 million. Net loss widened to $391 million, up from $310 million a year ago.

EA’s shares, which closed up 53 cents to $19.53, see-sawed in after-hours trading following the earnings release.

Corrected, 1:53 pm: An earlier version of this post incorrectly reported a net income of $20 million in the second quarter of last year. In fact, EA lost $20 million that quarter.

Updated, 5:27 pm: This post has been updated to reflect current stock price and details on layoffs at EA’s Tiburon Studio in Florida.


-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.