During EA’s earning’s call on Monday, it was announced the publisher is being forced to cut 1500 jobs across all of its studios, which is necessary, says CEO John Riccitiello, to “transform the company.”
“EA is performing well, with quality, sales and segment share up so far this year,” said Riccitiello during the call. “We are making tough calls to cut cost in targeted areas and investing more in our biggest games and digital businesses.”
Commenting on the poor performance of the videogame industry in general, Riccitiello continued:
“Retailers remain cautious and report that foot traffic remains slow,” he said. “The consumer is not showing up at retail as consistently as we would like.”
While the job cuts will only be completed by April next year, and form part of a strategic, long-term restructuring plan, the layoffs have already affected several studios under the EA umbrella, and will also result in “the closure of several facilities,” costing the company somewhere between $130 million to $150 million, but will save EA approximately $100 million per year.
Studios reported to be affected by the cuts include EA Redwood Shores (EA’s headquarters), Tiburon (Madden), Mythic (Warhammer Online, Ultima Online), Black Box (Need For Speed, Skate), Maxis (The Sims, Spore) and Pandemic (Mercenaries, upcoming The Saboteur).
“We have lots of compassion for those affected,” Riccitiello said, before adding that “these cuts are essential to transforming our company.”
This news comes after the announcement that EA has acquired popular online social gaming company, Playfish, in a cash and stock deal valued at $300 million, with a further $100 million to be awarded depending on the company’s ability to hit “certain performance milestones” before the end of 2011.