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EA says $16 million in operating expenses are due to restructuring costs

Things haven't been going all that well over at Electronic Arts. Despite being one of the biggest companies in the gaming industry, EA has been struggling with profitability. The profitability struggles led the company to shed employees over the last several months.

During its investor call this week, EA confirmed that it let about 900 workers go during its organizational restructuring process. EA also confirmed that the layoffs cost company about $16 million in the short term.
EA's Blake Jorgensen noted during the call that EA had $540 million in operating expenses for the current fiscal quarter. That figure is $15 million higher than the company had expected due to those costs associated with operational expense reducing actions, including layoffs. Some of the extra expense also came from the resignation of EA's CEO John Riccitiello back in March.

Jorgensen also noted that EA's plan for cost reductions would "reduce our overall headcount by approximately 10%." EA previously laid off the entire staff in its Montréal game studio.
EA was also gifted with the worst company award for the second year in a row last month. That award was bestowed on EA from The Consumerist.

Much of the blame for EA winning the dubious distinction of the worst company for the second year in a row was blamed on the online server disaster that happened with the company's popular game SimCity. Gaming servers that were overloaded prevented many people who purchase that game from being able to play, sometimes for days.

Source: Polygon

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By drlumen on 5/9/2013 1:55:31 PM , Rating: 2
I feel sorry for the people that have been laid off when the real issue is likely due to middle and upper management screw ups.

For example, with the SimsCity fiasco, it was not the developers decision to make it online only and for all the DRM. Likewise, I would guess that the developers tried to push for more servers and bandwidth but a manager somewhere, trying to cut costs, tried to squeak by with (less than) the minimum amount of servers.

But, at the end of the day, it's mostly programmers and artists that get laid off.

RE: Layoffs
By Reclaimer77 on 5/10/2013 8:09:38 AM , Rating: 2
For example, with the SimsCity fiasco, it was not the developers decision to make it online only and for all the DRM.

Lots of games are online only and don't suffer SimCity styled issues, if any at all. Sorry but you can blame management all you want, but whoever was in charge of setting up and deploying those servers absolutely deserves to be fired. It was one of the worst game launches in history.

You know as a gamer I understand the EA hate, but a lot of it goes way too far.

RE: Layoffs
By warun on 5/13/2013 12:29:38 PM , Rating: 2
Actually it wasn't even the guy who set up the servers, it's(again) the suits: they actually thought consumers like nothing more than military shooters/plain racing/football/shooting so they didn't think they'd have to set up many servers for simcity; the lead designer for SimCity herself said that they didn't think so many people would buy it hence the server over capacity.

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