EA Announces Increased Net Loss, Confirms 1,500 Layoffs
Electronic Arts said it would lay off 1,500 workers by April 2010, alongside second fiscal quarter results that saw the publisher post a decrease in year-over-year revenues and a widening net loss of $391 million.
About 1,300 of those layoffs are part of a wide-reaching restructuring plan that will include "the closure of several facilities." The move, which will cost EA between $130 million and $150 million, is expected to save $100 million annually (just over a fourth of what the company said it lost this quarter).
Earlier today, the publisher announced it acquired social game publisher Playfish
for $300 million.
EA's $391 million quarterly loss represents a 26 percent increase over the $310 million loss in last year's second quarter. It comes as GAAP revenue dropped 12 percent year over year to $788 million.
The company's earnings statement, however, pointed out that non-GAAP revenue, excluding the deferred earnings adjustments that must be factored into GAAP accounting, saw a record high of $1.147 billion, up 2 percent from $1.126 billion the year before.
"EA is performing well, with quality, sales and segment share up so far this year," said CEO John Riccitiello. "We are making tough calls to cut cost in targeted areas and investing more in our biggest games and digital businesses."
Looking forward, internal guidance pegs the company as maintaining profitability during its third and fourth fiscal quarters, but taking a loss for the overall 2010 fiscal year, which ends March 31. That loss will be slightly wider on a GAAP basis than previously expected, due to expenses related to the Playfish acquisition.