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EA Layoff Plans Reach 1000, Black Box To Be Consolidated
EA Layoff Plans Reach 1000, Black Box To Be Consolidated Exclusive
December 19, 2008 | By Leigh Alexander

December 19, 2008 | By Leigh Alexander
More: Console/PC, Exclusive

EA says it will lay off a further 4 percent of its workforce as it either consolidates or closes down "at least nine" of its studios. Including the company's recently-announced headcount reduction, this brings the company's planned layoffs to 10 percent of its total -- 1,000 employees.

EA's Vancouver-based Black Box studio is the only one specifically referenced in the company's announcement. Black Box, developer of the Need For Speed franchise and Skate series, will see its teams and projects moved to EA's nearby Burnaby, British Columbia studio.

The company declined to provide any details on the further planned closures and consolidations. It says that the consolidation and headcount reduction will save it $120 million annually, but will incur restructuring charges of $55-65 million over the next several quarters.

The plans announced today expand upon the restructuring initiatives EA announced at the end of October, when the company said it would lay off 600 employees, or six percent of its total. Sources believed at the time that the affected studios included Electronic Arts Los Angeles and Pandemic, as EA said it was effecting "a global reduction, not just focused on one studio or one location."

EA recently said its key titles underperformed in the latter part of this year, and as such, alongside the uncertain economic environment, it would need to reduce its financial estimates -- and its title portfolio -- into the new year. It also recently abandoned its plans to open a third location in Vancouver.

"EA is implementing a plan to narrow its product portfolio to focus on hit games with higher margin opportunities," said the company in a statement.

"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."

[UPDATE: Jeff Brown, vice president of corporate communications at Electronic Arts, clarifies the company's restructuring timeline: "This is not effective immediately," he says. "This is a process that's going to take place over the next three months, and straight into our next fiscal year on April 1."

Brown declined to comment further on the specifics of the planned consolidations or closures.]

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