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Software SCEA Layoffs Hit 80 to 100 Employees
Marcus Yam (Blog) - June 6, 2007 7:36 AM
Print E-mail del.icio.us 26 comment(s) - last by encryptkeeper.. on Jun 7 at 1:48 PM
Sony's game division downsizes by up to 100 employees

Perhaps in response to its biggest quarterly loss in four years, Sony could be trimming down its foreign computer entertainment divisions. Sony Computer Entertainment Europe became 160 employees lighter in mid-April, and it appears that now at the beginning of June, it is Sony Computer Entertainment America’s turn.

According to a now-former SCEA employee who spoke to Kotaku, approximately 80 to 100 were laid off from the company’s Foster City headquarters. An SCEA spokesperson declined to comment on the number of employees affected, but did confirm the layoffs.

"In an effort to accurately align the company to meet the changing needs of our consumers and of our industry, Sony Computer Entertainment America has found it necessary to analyze our current business and to restructure the company as necessary to continue our standing as the market leader," said Dave Karraker, senior director of corporate communications for SCEA.

"These restructuring efforts are currently underway and do include the streamlining of our operations and other initiatives to further strengthen the business, reduce costs and increase operational efficiency," added Karraker.

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Pic!
By Trogdor on 6/6/2007 7:50:16 AM , Rating: 3
That picture is perfect. lol




RE: Pic!
By Brandon Hill (blog) on 6/6/2007 7:53:51 AM , Rating: 5
"So what would you say, ya DO here?"


RE: Pic!
By FITCamaro on 6/6/2007 8:45:48 AM , Rating: 4
Do you actually take the spec to the engineers?

No my secretary does that...


RE: Pic!
By Spivonious on 6/6/2007 10:58:53 AM , Rating: 5
I have people skills!!


RE: Pic!
By mikecel79 on 6/6/2007 11:18:58 AM , Rating: 4
I deal with the god damn customer! I'm a people person!


RE: Pic!
By xuimod on 6/6/07, Rating: -1
RE: Pic!
By encryptkeeper on 6/7/2007 1:48:31 PM , Rating: 2
What the hell is wrong with you people!


PS3, the console PS3
By borowki on 6/6/2007 10:04:47 PM , Rating: 1
Shaka, When the Walls Fell.




And the Xbox 360 Juggernaut rolls on....
By xuimod on 6/6/07, Rating: -1
RE: And the Xbox 360 Juggernaut rolls on....
By michal1980 on 6/6/07, Rating: -1
RE: And the Xbox 360 Juggernaut rolls on....
By PitViper007 on 6/6/07, Rating: 0
RE: And the Xbox 360 Juggernaut rolls on....
By FITCamaro on 6/6/2007 8:44:46 AM , Rating: 3
Financial reports?

I love the Xbox but yes they have yet to make a dime off of it. Microsoft does this with many projects because they can afford to. Their revenues from their server products and business sales are so high they can afford to loose money in other areas. They spend billions on the Xbox and several more billion on the 360. Not only in design of the consoles themselves and losses from producing them, but also from setting up the Xbox Live service. Then you also have the multi-billion dollar ad campaigns for both consoles.

Now Microsoft has said due to the success of the 360, they will likely be in the black by next year. Some people hate Microsoft for the amount of money they make. But its because of that money they're able to do things like this which gives the consumer more options in more areas.

If they had not done the original Xbox, we would be stuck with only the PS3 for a next gen, high def console. Who knows if the Wii would be around either. Also who knows if the PS3 would even be as "good" as it is. Without the competition from Microsoft, Sony wouldn't have had to pack the PS3 with as much as they did (still doesn't excuse a $600 games console) to even have a shot of selling them other than just pure brand loyalty (which doesn't appear to be helping them as much as they'd probably hoped).


By FITCamaro on 6/6/2007 8:47:13 AM , Rating: 1
spent*


RE: And the Xbox 360 Juggernaut rolls on....
By sdsdv10 on 6/6/2007 10:35:24 AM , Rating: 2
All over the internet! Just google "xbox loses".

Here is the first link: http://blogs.guardian.co.uk/games/archives/2005/09...

The headline: Xbox loses $4 billion for MSoft in 4 years

And this is back in 2005 with the original Xbox, the 360 has continued the trend in the last year. As FITCamaro noted, MS has lost many billions of dollars getting into the video game market. They are doing the same thing with the Zune in the DAP market. The only reason they can get away with it is the have billions more in the bank. At almost any other company, this would have cost the CEO his job.


RE: And the Xbox 360 Juggernaut rolls on....
By FITCamaro on 6/6/2007 10:57:51 AM , Rating: 3
Not really. Companies often accept losses in the beginning in order to make money in the long term. Microsoft sees the Xbox division as a long term investment. They knew it would take years to turn a profit just from the nature of trying to break into a business such as the video game console market.

And they are starting to see the rewards. The 360 console is nearing the break even point for manufacturing. Revenues for games are coming in. They're making money off purchases on Xbox Live and from the yearly subscription fees ($50 for a year of access to playing every 360 game online is a bargain).

Breaking into any new business will almost always require losses for several years. The first company I worked for out of college had existed for 6 years before I started working there. Not one of those years had they made a profit. But now that the market is picking up in the industry they're in, they are starting to make money.


RE: And the Xbox 360 Juggernaut rolls on....
By sdsdv10 on 6/6/2007 11:13:29 AM , Rating: 2
I understand and agree with this concept. The first company I worked for operated at a loss for ~15 years before putting their first product on the market (it was a small pharmaceutical company). The difference here is in scale. In that entire >15 year period they spent less money developing a new AIDS treatment than MS lost in just a single year with the Xbox. A restatment of earnings (loses) on this scale brought down Enron, which had a hugh market cap at the time. I'm not really aware of another company willing or able to lose ~>1 billion/year for >5-6 years. Not disagreeing with you, I just think the scale of the loses here put this particular example in a league of it's own. One must remember, these are more than just paper loses. For the Xbox system ultimately to be profitable for the MS, it has to make up all those loses before you can say it was a net gain for them.


RE: And the Xbox 360 Juggernaut rolls on....
By sdsdv10 on 6/6/2007 11:18:29 AM , Rating: 2
One more tidbit, just to put it in perspective. MS has lost more money so far on the Xbox system than the private equity company paid for Chrysler.

quote:
Cerberus puts up $7.4 billion to get 80.1% of Chrysler.


http://www.usatoday.com/money/autos/2007-05-14-chr...


By bldckstark on 6/6/2007 12:14:36 PM , Rating: 3
Yes, but Microsoft has a better chance at being profitable than DCX does at this point!


By FITCamaro on 6/6/2007 11:33:13 AM , Rating: 3
Also remember that Microsoft spends a few billion a year on its research division that doesn't necessarily bring about any profit.

Its Microsoft's willingness to accept such losses that makes me love them as a company. They put having a kick ass product before making money sometimes on the idea that eventually they'll make money. And also so they can have their own complete solution in an area. With Windows, the 360, the Zune, Xbox Live, and Zune marketplace they have their own complete system. Now that doesn't necessarily make it all the best, but they have it. And thats what they're going for.


By SigmaHyperion on 6/6/2007 2:21:19 PM , Rating: 2
Enron didn't go under because it posted a loss. It went under because it LIED about them. It lied about virtually everything. When your entire company revolves around people trusting your credibility because you're dealing in intangible goods, lying is kind of a bad thing. In the line of business that they were in, you lose your credibility you lose your company -- that is why Arthur Andersen boarded up shop and ceased to exist afterwards. Not because they lost money but because they lost credibility.

If you're not aware of any companies willing or able to post the kind of losses that the Xbox has cost MS, I suggest you look around a little more. When you're talking about companies with market caps in the HUNDREDS of billions of dollars, a $4B loss spread over 5+ years is virtually pocket change to any company of that size. You're right, the difference IS scale. But that scale works both ways -- both in the size of the loss itself and in the percentage of a company's revenue that loss represents.

That's less than $1B a year, or only $250M/quarter. Companies post losses like that every single day. Many large companies sustain those kinds of losses for years upon years. To do that on a single market-segment of your business is nothing. You would probably be hard-pressed to find a company as large and diversified as Microsoft that didn't have at least one segment of its' business that cost it $250M/quarter.