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EA cuts 1100 jobs

Discussion in 'UHall' started by hawkeye_pike, Feb 4, 2009.

  1. hawkeye_pike

    hawkeye_pike Babbling Loonie
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    After a weak quarter with high loss, EA cuts more than every 10th job. While the revenue rose by 10 percent, the loss was 641 million US$ in the last quarter of 2008. The total loss accumulated to 1 billion US$.

    I guess (and hope) that there's no reason to worry for the UO team, as UO generates a solid benefit. The UO team we're currently having may be the best ever. We all cross our thumbs for them.
     
  2. AesSedai

    AesSedai Guest

    - ^2

    Hopefully the big bailiwicks will eventually realize that they don't deserve $XX,XXX,XXX when those that get $X are the ones that keep the company, and them, alive ;)

    On the other side of the flip-flop, if we UOers keep on keepin' on, then our positive income looks to be in a better-than-previous position to keep UO kickin' on...
    imho
     
  3. Harlequin

    Harlequin Babbling Loonie
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    1) Corporate cost cutting strategy practice number 1 - Cutting headcounts instead of bonuses and salaries to preserve jobs.

    Also known as the hire and fire management concept...

    2) Corporate manager response to any headcount reduction order - If ordered to fire 10 headcounts, fire the overpaid old timers first (less euthusiasm, waning creativity, probably knows how to skive TOO effectively, overall less bang for the buck), then the underpaid junior staff (just hired, so won't impact the department function as much).

    3) Corporate response to shareholder on waning profits - Cut headcounts using the bad economy as an excuse. Been wanting to streamline the company and make those loafers work hard for their money to increase the company profits and my multi million dollar bonus + share options. Now see 1)
     
  4. This doesnt look good , I wouldnt think:


    http://news.ea.com/portal/site/ea/index.jsp?ndmViewId=news_view&newsId=20090203006591&newsLang=en

    Based on this:


    http://herald.warhammeronline.com/warherald/NewsArticle.war?id=371
     
  5. Maplestone

    Maplestone Crazed Zealot
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    Yikes. 300k is definitely not what they had anticipated, but it does comfortably compare to non-WoW games out there.

    (I always hate that pause between "company announces X cuts" and the cuts actually happening. There's a reason "one of you will fall" prophecies are used as a device in horror movies ... it really gets under the skin)
     
  6. Tina Small

    Tina Small Stratics Legend
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  7. Lord Kynd

    Lord Kynd Guest

    nothing like posting a partial news story , geez
    they also went on to mention that there online games have made profit where as the rest of EA is loosing profit.

    "Revenue jumped 10 percent to $1.65 billion. The company also booked $88 million of revenue related to digital content and online-enabled games."

    here is the whole news story...

    "Electronic Arts posts wider loss, hurt by charges (AP)
    Posted on Tue Feb 3, 2009 7:33PM EST
    NEW YORK - Hurt by weak holiday sales and a slew of charges, video game publisher Electronic Arts Inc. posted a wider net loss for its fiscal third quarter and fell short of analysts' expectations Tuesday.

    But the economic turmoil was not the main culprit. Chief Executive John Riccitiello said a "a significant portion" of the quarter's shortfall, as well as the company's sharply reduced outlook for the rest of the year, has to do with EA's own performance.

    "Clear and simple, our titles did not perform to our expectations," Riccitiello told analysts during a conference call. EA had warned in December its holiday sales were softer than expected, even though the overall industry had a strong season.

    For the three months that ended Dec. 31, the publisher of games like "Rock Band" and "Madden NFL" lost $641 million, or $2 per share. In the same period a year earlier, it lost $33 million, or 10 cents per share.

    Excluding charges, EA said it would have earned 56 cents per share, but that was less than the 88 cents per share expected by analysts polled by Thomson Reuters.

    Revenue jumped 10 percent to $1.65 billion. The company also booked $88 million of revenue related to digital content and online-enabled games. Counting the deferred revenue, the sales total was $1.74 billion, below analysts' expectations of $1.9 billion.

    Still, EA's shares, which closed up more than 4 percent in Tuesday's trading, jumped nearly 5 percent in the after-hours session in what may have been investors' growing confidence that the company's cost-cutting measures are going in the right direction.

    Wedbush Morgan analyst Michael Pachter said he was "really impressed" that EA took responsibility for the weak results, and called the cost-cutting measures "realistic." EA is in the process of laying off 1,100 employees — 11 percent of its work force — and it's closing 12 facilities to trim costs and restructure its business.

    The company is also scaling back its product portfolio, focusing on high-quality games that are likely to be big hits. Chief Financial Officer Eric Brown said in an interview EA's plan also includes focusing more on games for the Nintendo Wii, which has been far outselling rival consoles like Microsoft Corp.'s Xbox 360 and Sony Corp.'s PlayStation 2.

    Japan's Nintendo Co. makes the bulk of the hit games for the Wii, but EA plans to capitalize on the console's popularity through upcoming games like EA Sports Active, a fitness product that takes advantage of the system's motion controller.

    In what Riccitiello called "a clear disappointment," Redwood City, Calif.-based Electronic Arts said it expects a loss of $3.29 to $3.56 per share for fiscal 2009, which ends in March. Excluding charges, it expects to post a loss of 35 cents per share — far below the profit of 60 cents per share that analysts were expecting.

    The company also forecast sales of $4.2 billion to $4.25 billion and adjusted revenue of $4.1 billion, the latter below analysts' expectations of $4.66 billion.

    Looking ahead to fiscal 2010, the company said it plans to slash operating costs by $500 million to align it with its lower sales projection.

    Pachter praised the cuts.

    "They were spending way ahead of their revenue generation and they have to catch up," he said.

    EA expects 2010 per-share results in the range of a loss of 5 cents to a profit of 40 cents. It forecast adjusted earnings of $1 a share, compared with analysts' expectations of $1.09.

    The company expects sales of $4.2 billion to $4.35 billion and adjusted revenue of $4.3 billion. Analysts are predicting $4.68 billion in sales.

    The company's shares jumped 70 cents, or 4.5 percent, to $16.20 in after-hours trading, having closed up 64 cents, or 4.3 percent, at $15.50."


    sure they have a loss, but not that much compared to many other places.
    also keep in mind unless they make some new game once you buy a game there really is no need to buy a second one, eventually supply and demand take over and there just is no demand.. ( kinda like the automakers.. never should have gotten bailout $$ when it is simply a supply and demand type situation.. giving them $$ is not going to make people buy more car's )
     
  8. Lord Kynd

    Lord Kynd Guest

    considering most 'big wigs' don't really do much except travel and sit on there bum's they really do not deserve to be paid that great.. not with all the 'perks' of the job title.

    chalk this resession up to greed.. people think they are worth more than they truely are.
    i'd go do his job and only expect 8$-10$ a hour. and be happy.
     
  9. the 4th man

    the 4th man Lore Master
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    Corporate knumbskulls aren't worth the toilet paper they wipe with, at least 99% aren't......they just screw up the economy, sorta like gold sellers in UO.....as for 8-10 bucks an hour....you can probably get that working at McDonalds.
     
  10. JC the Builder

    JC the Builder Crazed Zealot
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    About half of the loss (270 million or so) was attributed to EA's mobile division. There are some divisions in EA (not Mythic) which are losing money faster than flushing it down a toilet. Those are where the deep cuts/restructuring are going to happen.

    As for whether Warhammer is in a good position, consider it made about ~20 million dollars on box sales alone during launch. With 300,000 subscribers that is another 50 million dollars per year. The game could also turn around if the developers made some good decisions.
     
  11. Aurelius

    Aurelius Babbling Loonie
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    I'm reasonably confident UO has a future in the hands of EA/Mythic, and pretty sure it would not have had a future in the hands of 'core' EA alone - not that long ago, Mark Jacobs mentioned that the EA thinking was that UO should be closed, and he argued that it was still perfectly viable!

    Hopefully the corporate 'brains' behind EA will take note that the mmorpg area is one of the elements still making them money, and keep well away from it rather than meddle with something they really, deeply do not understand....
     
  12. rwek

    rwek Guest

    *news flash*

    And like all other companies, CEO makes 15 billion. :p
     
  13. Wakiza

    Wakiza Guest

    I concur.
     
  14. Sad to see some innocents might lose their jobs, but at the same time it looks pretty good for the online division. looks like they have 3 big names pumping alot of cash into the company ...and i tell ya a lot of folks would really freak if they lost 'their game'. haha. maybe me too! seriously tho, hopefully they will build on that (the online games - proven, tried and true) along with their visions of wii. maybe they should think about giving us a share of stock with each account. then we can all share in the ride.
    :D
     
  15. Littleblue

    Littleblue Seasoned Veteran
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    QFT.

    Even with the everyday person, those that I've know having the most problems were living well above their means. It's never a good idea to spend everything you make and then some on credit, loans, too much house, etc.

    I try to live moderately and save a little in case of a 'rainy day'. So far that strategy has kept things pretty normal for my financials, even through the gas hikes and general economic slump.

    Even in-game, I suppose I'm like this too...always looking for good deals and trying to practice patience when possible, hehe.

    The journey is the stuff of adventurous tales, not the ending. ;)
     
  16. Maplestone

    Maplestone Crazed Zealot
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