Electronic Arts to lay off 10% of workforce

Electronic Arts Inc. announced it will lay off 10% of its work force in a restructuring plan that includes a consolidation of facilities operated by EA. The majority of the restructuring will be completed by March 31, 2009. This announcement is a four percent increase from the six percent work force reduction EA announced on October 30, 2008.

EA expects the restructuring plan will result in annual cost savings of approximately $120 million and will bear a restructuring charge of $55-65 million over the next several quarters.

The restructuring will result in the closure of at least nine studio and publishing locations. The Black Box Studio in Vancouver, British Columbia will be shut down and The Black Box development teams and associated game franchises will be moved to the nearby EA studio location in Burnaby, British Columbia.

EA plans to narrow its product portfolio to focus on higher quality hit games with higher margin opportunities. EA stated in the press release 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.

One of the recent “creative risks” EA has taken was the evolution game Spore. Although the game has sold millions of copies, it did not live up to the hype and has the notorious distinction of being the most pirated game in history.

EA’s troubles may mean the game industry as a whole is being affected by the current recession, or it may mean EA’s latest games such as Spore are not selling as well as they like. Whatever the reason, the future looks to be a difficult one for Electronic Arts.

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