Gamasutra: The Art & Business of Making Gamesspacer
arrowPress Releases
July 13, 2014
PR Newswire
View All





If you enjoy reading this site, you might also want to check out these UBM Tech sites:


More layoffs hit EA
More layoffs hit EA
April 25, 2013 | By Kris Ligman

April 25, 2013 | By Kris Ligman
Comments
    54 comments
More: Console/PC, Production, Business/Marketing



EA posted on its news blog The Beat today that it is undergoing a new wave of layoffs.

With the announcement still fresh and rumors abounding about the scale of the layoffs, it is unknown at this time how many of EA's over 9000 employees will be affected -- but it's enough for EA to address the cuts publicly.

Gamasutra previously reported that EA laid off a significant amount of workers just earlier this month.

The statement from EA, dubbed an "Organizational Update," reads as follows:

In recent weeks, EA has aligned all elements of its organizational structure behind priorities in new technologies and mobile. This has led to some difficult decisions to reduce the workforce in some locations. We are extremely grateful for the contributions made by each of our employees – those that are leaving EA will be missed by their colleagues and friends.

These are hard but essential changes as we focus on delivering great games and showing players around the world why to spend their time with us.


We're following up with EA to get a clearer picture of what's happening at the company. If you have any information that can fill in the gaps, please get in touch with us at news at gamasutra dot com. All confidentiality will be honored.

UPDATE: A reliable source familiar with the situation at EA cast doubt on reports that 10 percent of the workforce has been laid off. We still don't have a clear picture of the extent of the layoffs, and don't expect to until possibly EA's earnings call early next month.

The source also said key titles that were being handled by EA Partners -- a publishing branch that handles externally-developed games -- are still on track, namely Insomniac Games' upcoming Fuse and the major title coming from Respawn Entertainment. Mobile-focused Chillingo is also continuing to work with independent developers to publish new titles. The EA Partners publishing label is rumored to have been discontinued.

The same source claimed that reports of 2,000 layoffs at EA are widely overstated.

UPDATE (4/26/2013): TechCrunch has shared an internal EA memo from executive chairman Larry Probst concerning the layoffs:

As we begin the new fiscal year, I want to provide you with a brief update on some important changes to our organization. As Executive Chairman, my focus is to ensure EA is delivering high quality games and services to our consumers, while helping the executive team develop a FY14 operating plan that drives growth, rationalizes headcount and controls costs.

In recent weeks, the executive team has been tasked with evaluating every area of our business to establish a clear set of priorities, and a more efficient organizational structure. This process has led to some difficult decisions about the number of people and locations needed to achieve our goals.

The workforce reductions which we communicated in the last two weeks represent the majority of our planned personnel actions. We are extremely grateful for the contributions made by each of these individuals – they will be missed by their colleagues and friends at EA.

We are also taking action to streamline our organization, including changes in two key areas:

· Core marketing functions have been consolidated under our COO, Peter Moore. The combined group will bring together our Label marketing teams, Global Acquisition Marketing and Marketing Analytics into one multi-talented team under Todd Sitrin’s leadership. The development and marketing teams will continue to work as cohesive units, driving clear and consistent messaging and consumer engagement for each of our franchises.

· Origin will move into Frank Gibeau’s Labels organization. Andrew Wilson will take on the leadership of Origin, working with CJ Prober and the team to create more value and an enhanced entertainment experience for our consumers.

Change is sometimes difficult, but essential. The adjustments we are making will put us in the best position to build great games and services, deliver them more efficiently to consumers, and demonstrate to players around the world why they should spend their time with us.

EA is a great company, with talented and hard-working teams, a strong portfolio of products and an extremely bright future.

Thank you all for your dedication and commitment to our long term success!


Related Jobs

2K
2K — Novato, California, United States
[07.12.14]

Community and Social Media Manager – Firaxis Games
2K
2K — Novato, California, United States
[07.12.14]

Director of Channel Marketing
2K
2K — Novato, California, United States
[07.12.14]

Senior Graphics Engineer - Core Tech Team
2K China
2K China — Shanghai, China
[07.12.14]

Senior Online Producer - Shanghai










Comments


William Johnson
profile image
I don't know...you think they'll maybe learn a lesson and stop with the anti-consumer nonsense?

Or are they going to double down on those practices and continue to blame their consumers, used game market, digital distribution, pirates, the boogeyman, or any number of other scapegoats?

James Yee
profile image
Double down most likely.

Zach Grant
profile image
Why aren't more videogame companies using a large contract staff to ramp up their headcount once a project gets going? That why layoffs don't need to occur once the project ships.

Paying someone an increased wage for a certain time period has to outweigh the overhead of a full-time employee.

That way employee can plan more for their future instead of the never ending surprise layoff cycles.

Alan Rimkeit
profile image
I have been wondering the same thing for years now. Companies like EA and Activision just need to up front and honest. Hire the people as contractors and tell them up front that once the game/project is done it is time to start looking for work.

Rob Graeber
profile image
Because there's a lot of people, if not the majority, that don't want contract work and would take another job than play the contract-to-hire game and get strung along.

Michael G
profile image
It does seem like it would be ripe for abuse, not that the current system isn't. Plus productivity would take a nosedive in the final couple of months.

Alan Rimkeit
profile image
@Rob Graeber - I was not talking about contract to hire. Just contract. It is how the majority of the entertainment world world really. Once the project is done it is time to move on.

[User Banned]
profile image
This user violated Gamasutra’s Comment Guidelines and has been banned.

Paul Ginger
profile image
It seems most of the non-syndicated Entertainment industry does use contract work but one might argue they also have the strong unions and groups like SCAG to protect the employees. That having been said we would not be the first industry to go this way. Seems crazy in these days of big name stars taking movies they want, but when they made gone with the wind, Clark Gable's studio "loaned" him to MGM to use since he was a salary man at another studio.

Joel Bitar
profile image
Perhaps if there were more standard tools, pipelines and roles this would work.
Now however a person who has shipped something using whatever tech you'll be working with on the next project is worth much more than someone new to it.

Karl Schmidt
profile image
While at the surface this sounds like a great strategy, it completely obliterates the concept of building a team that works on several projects over time together. Obviously this isn't working for organizations who can't schedule their projects in such a way that ramp on/off can be juggled to keep people employed.

Alan Rimkeit
profile image
@Paul Ginger - "It seems most of the non-syndicated Entertainment industry does use contract work but one might argue they also have the strong unions and groups like SCAG to protect the employees. "

This is a very very good point. I am all for Unionizing the entire workforce of the video games industry in America. Canada would work too but I am not sure about Europe or Asia. O_o

@Karl Schmidt - I agree with your point as well. But apparently the large companies to not value the well built team dynamic. Sad really, because efficiency equal money. But then I guess they figure that they can save on payroll expenses by always hiring new people instead of keeping their seasoned employees around. They have to pay those people more money as they are worth more. It is a lame paradox.

Paul Ginger
profile image
I think you will find that in Hollywood often times teams do stick together. Perhaps less so with the actors but entire production teams often work together and at times it gets so common as to be strings of movies made by almost identical people, say beer fest and grandma's boy. If you are part of the first Iron Man movie and you did good work, chances are you are part of the third and have more or less been gainfully employed for many years now.

It's definitely different, and people would have to adjust to being in and out of projects more often, get used to saving a bit, selling themselves a bit more sometimes and it will be really hard to break into the industry but I doubt it could be much harder than now. There would be a lot of adjustment but, I don't think stability will be quite so scarce, especially for the successful.

Karl Schmidt
profile image
@Paul Ginger What is going on with FX houses then? They've been operating with the contracting model yet are still not doing well.

Addison Martinez
profile image
Entertainment Unions, at least SAG-AFTRA, doesn't ensure employment. It only protects talent during the production and provides certain benefits (Pension and Health Plan) and a percentage of residuals. Residuals likely would not apply to the gaming industry as the film industry pays talent residuals based on secondary markets (which is pretty much the entirety of the game industry, unless you count a hard copy as the only major market).

However, I agree with the general theme of the contracting the staff. While there may be some downsides (lack of steady employment) I think it will lead to higher quality product. As a graduate of USC many of my friends went onto work/write for television and films. The ones in TV work hard, but the ones who made films, and dont have steady jobs, work harder and are constantly trying to push the envelope and make their next project better than the last.

Scott Jordan
profile image
This is indeed sad news but please take note EA that these bullshit corporate Newspeak press releases just add insult to injury. No one anywhere ever reads one of these and takes it at face value. We can all read between the lines and see that your business is unstable, that you don't know how to deal with it and that in order to protect your profit margins you're firing some of those employees to whom you are so grateful.

Here's a thought. Be honest about your current state of affairs. Treat your employees and customers with respect and not like commodities. Make an honest attempt to rectify past mistakes.

Then maybe, just maybe you won't earn another Golden Poo.

TC Weidner
profile image
and ironically, all the suits that have made and continue to make the bad decisions that have created the EA mess, somehow they will not be the ones let go.

Terry Matthes
profile image
What about John Reticello or Eric Brown? CEO and CFO both gone. "Resignation" at that level can be a polite term used to save face.

Jorge Ramos
profile image
@Terry Matthes,

The CEO and CFO might leave, with well deserved industry bans (wishful thinking on my part).

But until you nix the Board of Directors first that appoints these schmucks into power, and privatize EA so that the employees ARE the shareholders and are thus vested into the well being of making good business decisions, instead of daytraders that have never even touched a game controller or played a pc game in their lives, I don't see the situation changing.

[User Banned]
profile image
This user violated Gamasutra’s Comment Guidelines and has been banned.

Jorge Ramos
profile image
@Andrew,

Well, that's easy... because said 'suits' usually end up being the face of the company, or the part of the company that signs off or demands such unrealistic or bone-headed business decisions, and it is these same people that when push comes to shove usually never get shit-canned for the kind of things that typical income earning people would never be able to get away with.

Jeferson Soler
profile image
@ Andrew Webber - Jorge is right and some of the mistakes that the game company higher-ups are doing right now are similar to the mistakes that the company higher-ups did back in the 80's that ended up causing the first Videogame Stock Market Crash in the US. Contrary to what some people believe, the games of ET and Pac-Man for the Atari 2600 were not the cause of the Crash, but they reflected what would bring about the first Crash. Games with questionable quality, miscalculated/underestimated supply and demand, lack of empathy toward consumers, etc. were mostly connected to decisions done by company higher-ups in the US and similar mistakes are still being done. At this point, EA seems to be the worst of the bunch. At least, Nintendo of Japan owned up to its mistake when things weren't doing well with the 3DS in the first couple months and Iwata and the other Nintendo higher-ups had their salaries cut instead of throwing the employees under the bus.

TC Weidner
profile image
@andrew what is juvenile about a multi billion dollar industry? its become big business and thats part of the problem. How can anyone in this industry not think nor understand that those at the top, in charge of the checkbook ultimately call the shots.

Aaron Haaf
profile image
I really wonder occasionally if part of these lay-offs are cutting of "crap" or unnecessary employments.

That also being said, it's very sad so many people are just out of work :(

John Byrd
profile image
This particular play is copied directly from Jack Welch's General Electric playbook of the 1980's. It involves laying off the so-called "bottom-performing" 10% each other year or so, and then replacing them by rehiring. http://en.wikipedia.org/wiki/Jack_Welch

EA's operated this way for decades. The only surprising thing is that people are still surprised by it.

Jane Castle
profile image
In that case they must have laid off all of top management if they are going by that playbook....

Jeferson Soler
profile image
@ John Byrd - I'll admit that I'm surprised as I never heard of the playbook until now, but at the same time, I'm not that surprised as I have seen and heard that strategy being used over and over again. In the past, I have noticed company higher-ups use any excuse (including bad economy) to cut out the top earners, the little people or both just to save them some money.

Mathieu MarquisBolduc
profile image
Having seen a few of these layoffs from the inside, I can tell you this is not how EA does it. EA cuts the average guy. They keep the bottow-performing guys, because theyre cheap, and they keep the highly-paid experts, because they are critical. They fire from the competent average-performing, average-paid pool­.

Which of course, is a terrible idea, because the bottow-performing guys will never become experts, and a lot of the experts will get fed-up and leave, so you end up just lowering the average skill of your team year after year.

Mathieu MarquisBolduc
profile image
*append

Of course, managers dont always really know who's competent, so there are also some bottom-performing AND experts who lose their jobs among the rest. I was just explaining what they *try* to do.

Zirani Jean-Sylvestre
profile image
I heard this once from a chief of engineering talking about his glorious past but I didn't know about Jack Welch's playbook

The motto was this: do whatever it takes to keep the top 5%, make sure the 10% bellow are more than happy and try to get rid of the bottom 40%

He was specifically talking about engineering and not management.

Mike Weldon
profile image
Seems more like the THQ playbook from the late 2000's.

Kaitlyn Kincaid
profile image
I worked at a company that followed that idea... it was by far the most toxic work environment I've ever had the misfortune of being in (and that included the start-up that flat out exploited me for 6 months).

Anyone and everyone who was critiqued by their boss (which was everyone as they were also on a "three strikes" policy where everyone gets two strikes in their first month so they can be fired at any time) was paranoid that they would be in that bottom 10%. So entire teams would torpedo other teams in the hopes that making them worse would bump them up to the 11% mark.

It was petty, it was destructive, and it ultimately drove the entire company to bankruptcy. Everyone was so scared that they would be fired they would do anything they could to make sure it was the other guy. I left after just over a year... two years later the entire company folded up.

Jonathan Murphy
profile image
EA, please stop! You're supposed to do this, as I predicted 4 years from now. You're dying too early!

Jorge Ramos
profile image
Is there a wager pool somewhere I'm not aware of as to "when will EA die?"

If so, I'm grabbing the popcorn... what are the odds on now? ;)

Jeferson Soler
profile image
LOL

Alan Wilson
profile image
"In recent weeks, EA has aligned all elements of its organizational structure behind priorities in new technologies and mobile. This has led to some difficult decisions to reduce the workforce in some locations. We are extremely grateful for the contributions made by each of our employees – those that are leaving EA will be missed by their colleagues and friends."

That really is such a pile of pseudo-corporate b/s. That first sentence is just complete gibberish. I still wonder why investors want to put their money behind that sort of nonsense. Whatever happened to the basic concept of sustainability and supportable growth?

And that last sentence... "will be missed by their colleagues and friends". Not by the EA senior management, who clearly don't come into either category there.

Jakub Majewski
profile image
I take it you've never been in a situation where you had to fire someone you like, whose contribution you value, for the good of the rest of the team? No? Then perhaps you shouldn't be so opinionated.

I'm not saying this in support of EA's current actions - I am in no position to judge them either way. But I'm really, really tired of this "oh, they're so evil for firing people" attitude. In very many cases, firing people is exactly the right decision to make. Not because it makes the numbers look better on the balance sheet, but because it prevents a far bigger disaster later on. People often fail to comprehend that firing twenty people now, as cold and brutal as it feels for those twenty people, can be done to avoid having to fire a hundred people next year.

And remember, ultimately, no one is hurting anyone here. Repeat that as a mantra, because it's so crazy, we find it hard to believe that it's actually true in a situation where so many people's lives are disrupted in such a painful way. But it is - no one is hurting anyone here. These are consenting adults. No one was promised a lifetime of employment. No one was given any guarantees about the circumstances in which they could be fired. Unless contractual obligations are violated (which, admittedly, would not be unusual given EA's history of mistreating employees), EA is not harming anyone.

And by the way, in the case of EA, this kind of criticism is all the more absurd by the fact that for years, people have been criticising EA for the way it carries on as though nothing was wrong. Most of the time in the last couple of years, EA has been posting losses or a profit so small that it might as well be a loss. So, just how do people expect this to be corrected? By asking people nicely to buy more games?

TC Weidner
profile image
In recent weeks, the executive team has been tasked with evaluating every area of our business to establish a clear set of priorities, and a more efficient organizational structure. This process has led to some difficult decisions about the number of people and locations needed to achieve our goals.

------------------------------------

the executive team= the Bobs

in so much as ..

Bob Porter: We're gonna be getting rid of these people here... First, Mr. Samir Naga... Naga... Naga... Not gonna work here anymore, anyway.

Kelly Kleider
profile image
Good luck with your layoffs!

David Verney
profile image
I feel sorry for the people who have been laid off, but if EA can achieve the same kind of quality in their games that they are known for and have a smaller workforce then good for them. I just hope it's not a reflection on the rest of the industry.

As a games design student, I am eager to get into the industry when I graduate. I hope the industry keeps growing like it has been, regardless of these redundancies.

Christopher J
profile image
"if EA can achieve the same kind of quality in their games that they are known for and have a smaller workforce then good for them".... hahahaha!!

Good for EA. Not good for the economy. Not good for the folks who have to now work 90 hour weeks. Or the children, and wives, or health of those employees. But I guess that doesn't matter.

Christopher Shell
profile image
Your words remind me of two people I knew back in college. They were young, single and possessing passionate aspirations to be game developers. One of them got an internship and was later hired full-time as a gameplay programmer, the other got a job in a different industry (telecommunications) still with aspirations to become a game developer one day.

The one who got a job in the game industry ended up leaving the industry, the one who got a job in telecommunications discovered he was happy where he was and lost his desire to transition to the game industry. What did they have in common? They both started families and realized the importance of stability and work/life balance when you have a spouse and children.

Christian Nutt
profile image
EA: creating that which will destroy it. Good job Game Industry!

Johnathon Swift
profile image
I'm surprised to admit this actually sounds smart.

Getting rid of failing business areas, consolidating business units that have no real benefits from being separate. I'd love to see the stupid "labels" thing go away. Hopefully a bunch of the people fired were the analysts and middle managers that apparently run amok in EA.

It's easy to criticize and "fight for the little guy!" when you're only experience and point of view is that of the little guy. If suddenly you're the guy in charge, then asking why you're paying a bunch of people that aren't making you any money whatsoever is very important question.

Still, EA's going to need to do a lot more than get rid of its excess studios and employees that aren't making any money. It's also going to have to turn around those studios and games that should be making a lot more money than they are currently EG Dead Space/Sim City/etc.

Christopher J
profile image
"It's easy to criticize and "fight for the little guy!" when you're only experience and point of view is that of the little guy" = Assumption

Sean Sang
profile image
The biggest problem I see with EA has to do with their continuous buying up companies only to write it off as a loss a short time later. Seems like Ea would be better off spending their money more wisely so they wouldn't have to clean house every few years to compensate to their investors. I'm also confused how they say they want to focus on mobile but then close down their mobile studios.

Chad Berger
profile image
Contract is 'not' the majority. Contract favors the company not the employee. And why are you in the industry, work so hard on your reel, go to school for years, so you can be a nomadic fool fighting for the next ' contract '. To be honest if all work was contract I would abandoned the industry as the trash it would be.

No offence but contract is disrespectful, and offensive. If you don't have the money for a proper staff get off the pot. And people that think 'contract' is okay are fools, who have no problem living like a broke teenager in some basement suite paying for their own dental all their lives. Get a real job.

What I see is contract is for people that are low cost, low labor with a demo reel that does not stand out or warrant full time work for example a student hire. Contracts have no business existing for Senior or Lead positions of any kind.

Contract, sorry that makes me laugh. How can you have any sense of respect if you've been in the industry for 10 years and are living on 'contracts' (dog scraps) it's time to change industries. Let the industry die so it is forced to come back strong and treat people with respect, and the full time employment they deserve.

Jane Castle
profile image
Obviously you haven't dealt with many contractors in your work. I know of a contractor who ONLY does concept art and gets $1500 a day. So your point about contractors being low cost, low skilled is completely inaccurate. Most contractors that are successful in my experience are of senior level otherwise no one would hire them for the rates they charge.

TALENTED Contractors in the art realm in North America generally bill in the $40-$50/hr range. If that is considered low cost to you and disrespectful I suggest you stay in full time employment.

Even the Eastern European contractors are not as "cheap" as one might think. The rates are $20-$25/hr which while in California would not be such a great rate, in that part of the world this is an excellent salary. Again of course you have to be good enough to command these types of rates.

You could argue that long term employment provides better security, but considering all the layoffs this no longer seems to be the case....

Chad Berger
profile image
Your talking about the slim 5% of contractors in the game industry, or your completely talking about the film industry.

The majority of contact jobs, especially at EA are all low wage 40 - 50k temp jobs. You obviously don't know what it's like to be laid off, and be lucky to get an interview for some garbage contract job that pays for 8 weeks of employment.

Do us all a favor and talk about the majority, not the 'minority'. Talking about the slim overpaid contractors out their won't encourage the thousands out of work right now.

And I come from 10 years of full time employment, places that pay proper benefits, high salaries and amazing bonuses with successful titles. Defending the practice of 'contractors' (the ones we all know EA uses, low cost fodder employees is a foolish thing to do). Try hard to remember the 'human' element of this please.

Jane Castle
profile image
Sorry but they are hiring low skilled contractors. As an employer that is THEIR RIGHT..... I've searched high and low.... These are the rates that people with solid experience charge. You can get contractors that will go as low as $12 (In India and China) and the work will reflect their skill level.

If you know of anyone with solid work experience in North America that produces top quality work for less than the rates I have listed, please be sure to send them my way. There is no one with solid experience that I can find that will work for less. The same goes for the Eastern Europeans, it is 20-25 per hour or they can't be bothered.

I am also not defending what EA does. However, you must remember EA is a business FIRST and foremost. If they want to foolishly think they can maximize profits by hiring fodder than that is their right as a corporation. Just as it is an employees right to not work at EA or quit EA at their choosing.

Kheper Crow
profile image
As a contractor I can say my life is pretty good. I only need to work one year and then can take another year off to do what I please. I actually charge lower rates than I should as I negotiate flexible hours and other benefits, so my normal work week is more like 30 hours. And you can charge over 40 hour rate, so when the salaried schmucks are working 60+ hours and cutting their hourly rate well below what I make, I ask my boss if they want me to work 9 times out of 10 they don't want the extra cost so I go home. I have never worked more than a 50 hour weeks since becoming a contractor.

In short, I have more work freedom, more job diversity, and a better quality of life than any of my salaried friends. So tell me, how does this favor the company? I think salary work is the real corporate dogs, you work too many hours, get passed over for promotions, and get handed all the crap jobs. But, at one point, I too thought salary was the best and only way respectful work. Boy was I wrong! The industry would become a vastly better place to work if we dropped this useless studio model and moved to a core structure with floating contractors to staff up a project.

Liam McMahon
profile image
when is the US monopoly laws going to gut the rest of this Evil Ampire

Kelly Kleider
profile image
Uhmmm, never?
EA has nothing like a monopoly. Nor is it the biggest publisher.

William Johnson
profile image
@Kelly Kleider
The NFL License?


none
 
Comment: