EA Loses $310 Million, Lays off 600 Employees

[solofowaffles]

Re: EA Loses $310 Million, Lays off 600 Employees

That sucks people losing their jobs.

[Shawn Zipay]

EA has posted its second quarter results today, and things aren't looking too good. The company has recorded a $310 million net loss for the quarter, compared to the same quarter the year previous in which the company only lost $195 million.

While they lost $310 million, their revenues for the period were up to the tune of $894 million. This figure is a substantial increase over last year's $640 million for the same period.

"Considering the slow down at retail we've seen in October, we are cautious in the short term," said John Riccitiello, Chief Executive Officer. "Longer term, we are very bullish on the game sector overall and on EA in particular. The industry is growing double-digits on the strength of three new game consoles and increases in the number of homes with broadband internet connections. EA is well positioned to benefit from these technology drivers due to the strength of our creative studios and our broad collection of game properties—from The Sims, to Spore and Madden NFL, to Warhammer Online."

The company also shared a few quick details about their better performers:

— Madden NFL 09 sold 4.5 million copies and was the number one title across all platforms in the quarter based on NPD data.

— SPORE is a hit selling nearly 2.0 million copies in just 3 weeks — over 40 million creatures have been uploaded into Sporepedia(TM). SPORE is the number one title on the PC in North America and number three title in Europe year-to-date.

— Warhammer Online: Age of Reckoning, an MMO from EA's Mythic Entertainment studio, sold 1.2 million copies in the quarter — with over 800 thousand current players.

— EA Mobile is the world's leading publisher of games for phones — with revenue of $47 million — up 24 percent year-over-year.

However, due to the company's poor performance, nearly 6% of their workforce was laid off. This equates to roughly 600 people now out of a job. These layoffs are part of EA's cost reduction plan which will result in annual, pre-tax savings of nearly $50 million.

Other aspects of this cost reduction plan include hiring fewer people. Positions that needed people before will simply be closed without new people being hired to fill spots.

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