EA Lays-Off 600 in Wake of Strong Spore Sales
EA Lays-Off 600 in Wake of Strong Spore Sales
Posted 10/30/2008 at 5:29pm
| by Nathan Grayson
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How cool would it be if you could tidy up your long-to-the-point-of-swaying-in-the-breeze toe nails and save $50 million? Because that's essentially what EA did today in the process of announcing its quarterly earnings.
Everyone's favorite 37.5% of the industry laid-off 600 employees -- a mere 6% of its workforce. Apparently, that'll save the company a whopping $50 million.
"These are challenging economic times around the world, and it's impossible for any business leaders to predict the future," said spokesperson Mariam Sughayer. "However, EA has made good progress in improving product quality, building a holiday lineup of titles that is extremely strong, filling our new IP pipeline, and expanding our Direct-To-Consumer and online businesses. As well, our talent remains the best in the industry."
If nothing else, Spore was a major success -- serving 2 million marginally happy customers over the course of three weeks.
Check out the full press release on EA's investors' site, if you'd like to overwrite your childhood memories with numbers. So many numbers.
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Pixelated
November 07, 2008 at 7:32pm
I fail to see how 2 million sales on 3 platforms on what is supposed to be AAA title constitutes as a success. Yes those numbers count the PC, DS and mobile.
horzo
October 31, 2008 at 3:05pm
I'm a little surprised that Spore sales are strong. I wonder how many of those were pre-orders or within the first week of release? Hard for me to believe that it's racking up a ton of "word of mouth" sales.
sirphunkee
October 31, 2008 at 7:18pm
Believe it. My 13-yr-old daugter is a wonderful barometer of the forces driving mainstream popular media marketing and sales...and judging by the buzz this game has generated among her peers, I would definitely say that word of mouth is indeed a driving factor in SPORE's (continuing) strong sales.
sirphunkee
October 31, 2008 at 12:25pm
Here's an interesting passage, buried deep within the earnings statement:
"Certain Abandoned Acquisition-Related Costs. Electronic Arts incurred significant legal, banking
and other consulting fees related to the Company’s proposed acquisition and related cash
tender offer for all of the outstanding shares of Take-Two Interactive Software, Inc. On August
18, 2008, the Company allowed the tender offer to expire without purchasing any shares of
Take-Two and, on September 14, 2008, the Company announced that it had terminated
discussions with, and would not be making a proposal to acquire, Take-Two. The costs
incurred in connection with the abandoned proposal and tender offer were outside the ordinary
course of business and will be excluded by the Company when assessing the performance of its
management team."
Keith E. Whisman
October 31, 2008 at 9:17pm
Just as I said. management wastes money and now everyone else that is not part of management has to pay, be punished. Get fired.. See it sucks and these people have the right to be pissed off. I am pissed off. I'm sure it's more than just it's wastfull dealing with TakeTwo. Gotta be. I say fire the idiots that thought it was a good idea to go after taketwo interactive. See it's not fair at all. If they were union employees they could have lawyers
investigate.
Jonnycal13
October 30, 2008 at 9:25pm
I am saddened by this. If they are such a great company with such a fine lineup of solid titles, then why don't they invest in their future with confidence by expanding, educating, and developing ALL their employees. This shows a terribly conservative approach with either many unstated negative expectations or a lack of leadership. I find it hard to believe that such a positive statement by EA could be attached by the layoff of so many of its "valued" employees.
Jon from Manteca, CA
Keith E. Whisman
October 30, 2008 at 9:39pm
Not entirely conservative. This seems to be very kneejerk. Conservative would be more thought out. They would have the number of employees they needed from the start. They wouldn't have hired as many for unnecessary posisitions. I say it's just terrible management. like the City of Phoenix Management. Hahaha... I'm talking as an insider here.
Vahn16
October 30, 2008 at 9:29pm
Really, EA's probably playing it safe because it's banking on so many unproven games this holiday season. Dead Space, Mirror's Edge, Left 4 Dead, etc. Not that I condone firing 600 people, but our ravenous hunger for new IPs can also partially be blamed for EA's cost-cutting measures.
Keith E. Whisman
October 30, 2008 at 8:42pm
Oh yeah we have a wildly successful product... Let's cellebrate by firing everyone during the holiday season. Shame on you EA. You are going to fire the very people that gave you a successful product. What gratitude. I would sue. I hope they are all union.
US_Ranger
October 30, 2008 at 10:43pm
What's with some of the knee jerk responses like from Keith?
1) EA isn't basing the release of part of the workforce over the success of a game like Spore. They are looking ahead at the coming recession (assuming Q4 shows negative growth) and probably realizing that buying games is a luxury that less people will partake in.
2) You would sue? For being released from a job? Wow, maybe a more socialist country would be to your liking. The job of any company is to keep a profit margin. If that can be increased than workers will be laid off/hired as needed. This is part of free market economics.
3) This isn't about "gratitude" for making a successful game either. It's probably a screw up on their part to have so many workers in the first place so now they are downsizing in order to weather the coming storm.
Please think a little more next time rather than seeing "EA" and then automatically thinking "I HATE THEM" or whatever goes through your head.
Keith E. Whisman
October 30, 2008 at 11:17pm
I'm just talking out the side of my ass here. It pisses me off because the City of Phoenix is going through the same thing with mismanagement. Inept management. The City had pie charts and projections showing the money they would get from property taxes and things like the Superbowl and stuff like that. With the projected money in mind the City spent the projected ammount money on stupid crap. Adding more programs and just mismanaging things. There were managers taking extravagant trips to resorts and islands and stuff like that. Now the banks are dying and people are loosing their homes because they couldn't afford the interest rate hikes they have to pay now. Also people getting laid off and also are not able to pay there house notes. So the city didn't get almost a billion dollars in projected revenue and they had bills that were in excess of 800million more than what the city actually has. So good people that have been with the city and different city departments have to pay by getting laid off because of these enept city managers. It's crazy and words like sue and unfair get repeated by everyone. These city managers don't lose their jobs however.
EA I believe hired way too many people than they really needed. Inept management. They spent projected revenue befor they got it on extravgant trips and toys. And the people that are trying to survive have to pay for it. The inept managers don't get into trouble or even say they are sorry. I know that I couldn't sue but it's almost criminal how they treat people. People have to live and survive. We buy houses and cars and rase families. These people are just told one day they are gone. It's not fair. Yes I believe in the free market but it sucks to have your life turned upside down because someone was an ass. Just because I and the employer enjoy the right to end employment at anytime doesn't mean you can't get pissed off.
I don't hate EA at all. I hate dumbasses that screw other people over that's all. If it's a good reason then I can understand. If I lose my job as a City Bus Operator then I will be very upset because I know it was because of the enept management. Although I'm a Republican I'm also a member of the local transit union. I'm voting for McCain. But I'm starting to see things differently than I used to since I've been a union member. Where I work my voice does have some power. I can't just get fired without a hearing.
US_Ranger
October 31, 2008 at 2:02am
Fair enough. I see what you're saying now. I didn't understand the point you were trying to make from your little blurb above but your detailed response makes a lot more sense. And I agree that it's most likely poor decision making from the top level that caused it in the first place. When the economy is good, it seems that many companies (EA in this case) don't bother thinking about tougher times ahead and then have to pull the rug out from under the feet of the employee when those rough times come.
If anything, this is a good case of showing why reckless expansion is not a good idea. However, I can't help but wonder what specific jobs these employees had. I wonder how many were making a cut above minimum wage and can just move to another job that doesn't pay much less. The overall number doesn't tell that story.
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