Electronic Arts cuts 1,500 across company, cuts 'significant' in Burnaby

SpongeG · #1 Posted **Nov 10, 2009, 5:53 AM**

Electronic Arts cuts 1,500 across company, cuts 'significant' in Burnaby

VANCOUVER, B.C. — Video game maker Electronic Arts (Nasdaq:ERTS) is cutting 1,500 jobs or about 17 per cent of its workforce, including a "significant" reduction in staff at one of its Canadian operations.

The company behind such games as "Madden NFL 10" and "Rock Band" said Monday the cuts include closure of several of its facilities across North America and dropping some of its titles, to save it $100 million annually.

A Canadian spokesman for the company said the "reductions are significant" at its operations in the Vancouver suburb of Burnaby, however the studio will remain open.

EA would not break down the cuts by region or comment specifically on the fate of its operations in Montreal and Edmonton.

Before the layoffs, the company had about 2,700 employees across Canada, including 1,500 in Burnaby, B.C. and the rest in Montreal and Edmonton.

California-based Electronic Arts, also known as EA, said the restructuring is being done to help it focus on higher-profit titles, and as a result of a challenging market for game sales as a result of the recession.

The cuts include 900 in development, 500 in publishing support and 100 from administrative staff.

The cuts are in addition to the 1,100 jobs the company already slashed this year as part of a restructuring plan to shift focus to hit games.

The layoffs came alongside EA's announcement it was buying Playfish Inc., the creator of popular social networking games such as "Who Has the Biggest Brain" and "Pet Society," for US$275 million.

That deal moves EA further into the lucrative world of social online games, which tens of millions of people play on Facebook, MySpace, the iPhone and other platforms.

"We are making tough calls to cut cost in targeted areas and investing more in our biggest games and digital businesses," EA chief executive John Riccitiello said Monday.

Also Monday, EA reported a second-quarter loss of US$391 million, or $1.21 a share, 26 per cent wider than the loss from a year earlier.

Net sales fell 12 per cent to $788 million in the July-September period. But sales including deferred revenue from online games grew two per cent to $1.15 billion, inching past Wall Street's expectations.

EA also said it expects to report a net loss for the full fiscal year.

After record retail sales in 2008, the video game industry has faced a tough year as consumers cut back on discretionary spending as a result of the global recession.

The latest cuts come after EA announced at the end of last year that it would slash its workforce by about 10 per cent to save $120 million a year.

At that time, EA also moved its Vancouver-based Black Box Studio, known for the popular driving game "Need For Speed," to its Burnaby facility.

EA said Monday that this latest round of cuts will be complete by March and result in restructuring charges of between $130 to $150 million.

The company had about 9,000 employees and about 31 titles before Monday's announcement.

EA shares were down two per cent to US$19.20 in after-hours trading on the Nasdaq Monday.

-With files from The Associated Press

http://www.google.com/hostednews/can...88ExsJO7EA89Kg

Metro-One · #2 Posted **Nov 10, 2009, 6:13 AM**

Well this sucks...

Hopefully Vancouver's cuts are in proportion to the Edmonton and Montreal, I would hate to lose some of the only industrial clout (high tech, gaming) this city has.

Alex Mackinnon · #3 Posted **Nov 10, 2009, 7:40 AM**

One of my friends from high school got the boot which is a shame, but in all honesty EA has put a lot of crap out for a long time. It's finally just starting to catch up to them.

SpongeG · #4 Posted **Nov 10, 2009, 7:57 AM**

i just also saw a US call centre laid off 700 people in Surrey - theres a lot of unemployed people out there now

mrjauk · #5 Posted **Nov 10, 2009, 10:07 AM**

Quote:

Originally Posted by SpongeG

i just also saw a US call centre laid off 700 people in Surrey - theres a lot of unemployed people out there now

Yet the demand for 500,000 dollar mortgages continues unabated. Something does not add up here.

gillty · #6 Posted **Nov 10, 2009, 10:58 AM**

Quote:

Originally Posted by Metro-One

Well this sucks...

Hopefully Vancouver's cuts are in proportion to the Edmonton and Montreal, I would hate to lose some of the only industrial clout (high tech, gaming) this city has.

Actually Edmonton (Bioware = incredibly successful) and Montreal (newer/aux studio) are not part of the affected studios. EA is closing down Blackbox, who were moved into from their Downtown offices into EA Canada's Sanderson Way campus last December after earlier layoffs. The rest of the layoffs are in the US.

Since Riccitiello has become the CEO of EA he has pretty much turned their image around from a few years ago being a evil shovel-ware publisher, to a highly respected publisher that is willing to put out new and innovative games.

Blackbox had very few titles in development (NFS, Skate 3, exciting action game lol) with primarily the Need for Speed Franchise being the studios history. After a few terrible NFS titles, NFS is in the process of being rebooted. (5 different titles farmed out w/ Blackbox hoping to release theirs in 2011) Blackbox was already in trouble.

Hed Kandi · #7 Posted **Nov 10, 2009, 2:00 PM**

Quote:

Originally Posted by mrjauk

Yet the demand for 500,000 dollar mortgages continues unabated. Something does not add up here.

In Vancouver unemployment is irrelevant, for it is not local money which is providing the means to property acquisition.

WarrenC12 · #8 Posted **Nov 10, 2009, 2:20 PM**

Quote:

Originally Posted by Hed Kandi

In Vancouver unemployment is irrelevant, for it is not local money which is providing the means to property acquisition.

The "rich foreigners are buying real estate" theory has been proven to be BS again and again. They make up 5% or less of real estate purchases.

jlousa · #9 Posted **Nov 10, 2009, 3:03 PM**

But who needs facts when it's much more fun to throw out fictional anecdotes? It's always if I can't buy a house then I don't understand how anyone else can to.

Anyways an above poster has already stated the issue with EA, they secured themselves for a long time and it's only biting them now. Their DRM is terrible, the refresh of their sporting titles has had minimal effort for a long time, heck they used to own the sporting sector now there are 3-4 others in there with them.

Hed Kandi · #10 Posted **Nov 10, 2009, 3:12 PM**

Quote:

Originally Posted by WarrenC12

The "rich foreigners are buying real estate" theory has been proven to be BS again and again. They make up 5% or less of real estate purchases.

Erroneous.

The wealthy foreigner is no myth, rather the wealthy foreigner has been disguised under the veil of a nugatory Canadian citizenship.

WarrenC12 · #11 Posted **Nov 10, 2009, 3:19 PM**

Quote:

Originally Posted by Hed Kandi

Erroneous.

The wealthy foreigner is no myth, rather the wealthy foreigner has been disguised under the veil of a nugatory Canadian citizenship.

By all means please provide your evidence.

Hed Kandi · #12 Posted **Nov 10, 2009, 3:41 PM**

Quote:

Originally Posted by WarrenC12

By all means please provide your evidence.

The stories are countless, but yes I will share one.

A former roommate of mine has a very wealthy aunt and uncle. This aunt and uncle attribute their fortune to a successful factory in their native country where they employ dozens perhaps hundreds of workers.

Approximately 10 years ago this family moved to Vancouver and purchased a multi million dollar home in Point Grey. The aunt does not work but spends her time learning English and shopping, whilst the uncle makes trips between Canada and his native country to manage the factory.

After 5 years of living in Canada our government had granted them citizenships, thus deeming them Canadians citizens. Hence, it was not the "5% of wealthy foreigners" who purchased the property in Point Grey, it was 'Canadians' - or so reflects the statistics.

WarrenC12 · #13 Posted **Nov 10, 2009, 5:40 PM**

Quote:

Originally Posted by Hed Kandi

The stories are countless, but yes I will share one.

Countless factory owners moving to Point Grey... sure.

Your story is a foreigner buying here. Their citizenship came much later. Their entry into the market is what helps set prices, nothing to do with today. This is evidence of the 5% figure. How many factory owners are coming to Vancouver? Why not Toronto?

What makes Vancouver different and somehow attractive to these wealthy foreigners? The answer is nothing. It's all locals, excited about Olympic hype, or whatever else, driving prices up.

bils · #14 Posted **Nov 10, 2009, 5:43 PM**

this has nothing to do with 'rich foreigners'

but rather it has to do with relatively cheap real estate in vancouver compared with asia, and the influx of people looking for a 'bargain'

jsbertram · #15 Posted **Nov 10, 2009, 7:04 PM**

Quote:

Originally Posted by SpongeG

Electronic Arts cuts 1,500 across company, cuts 'significant' in Burnaby

...

As brutal as this is for the people losing their jobs, some of them will use this as an opportunity to take their skills learned at EA and create niche or boutique companies. Who knows - the next Facebook or Twitter may emerge from this.

gillty · #16 Posted **Nov 10, 2009, 7:23 PM**

wow this thread went off the rails

Anyways a lot of the studios in Vancouver are filled with ex EAC or EA Blackbox employees. I'm sure a few of the Blackbox employees will stay on at EAC in burnaby to finish up Skate 3. Blackbox was already in trouble with NFS being farmed out/rebooted. Blackbox also seems to be a sizeable chunk of the 900 development jobs in the layoff, the rest being in the US.

LeftCoaster · #17 Posted **Nov 10, 2009, 7:37 PM**

Quote:

Originally Posted by WarrenC12

What makes Vancouver different and somehow attractive to these wealthy foreigners? The answer is nothing. It's all locals, excited about Olympic hype, or whatever else, driving prices up.

You serious? There are many many factors which seperate the Vancouver and Toronto markets, ranging from intangibles like desirability to measurable factors such as available land supply and property tax rates.

Vancouver is a very attractive market to invest in, both for domestic and international investors. Could you please source your 5% number? I'd be really curious to see where it came from and under what instances it is pertinent.

SpongeG · #18 Posted **Nov 10, 2009, 8:59 PM**

Quote:

Originally Posted by jlousa

But who needs facts when it's much more fun to throw out fictional anecdotes? It's always if I can't buy a house then I don't understand how anyone else can to.

Anyways an above poster has already stated the issue with EA, they secured themselves for a long time and it's only biting them now. Their DRM is terrible, the refresh of their sporting titles has had minimal effort for a long time, heck they used to own the sporting sector now there are 3-4 others in there with them.

pot money is keeping vancouver going - not just the green stuff itself but all the spin off businesses - hydroponic supplies etc - an old sales guy i used to work with when he got laid off he went and got a job with some pot spin off that sells stuff to pot growers and he says its amazing the money he is doing much better in it than he was doing what he did before

WarrenC12 · #19 Posted **Nov 10, 2009, 9:24 PM**

Quote:

Originally Posted by LeftCoaster

You serious? There are many many factors which seperate the Vancouver and Toronto markets, ranging from intangibles like desirability to measurable factors such as available land supply and property tax rates.

Vancouver is a very attractive market to invest in, both for domestic and international investors. Could you please source your 5% number? I'd be really curious to see where it came from and under what instances it is pertinent.

Check this article from the Sun last year (via Landcor).

http://vancouverforhomes.com/_media/...dRealities.pdf

So, in 2007 I believe there were approx 113,000 land title changes in BC, of which 9375 came from buyers outside BC.

Of those, the vast majority are from other parts of Canada, in fact there are more people from Ontario buying in BC than "the rest of the world". I have no doubt that people escaping from the Hong Kong handover in the 90s had an effect on real estate in Vancouver, but those days are long gone.

Edit: I found the 2008 data. Far less sales, less out of province sales, overall the same story but this has some more detail:

https://www.landcor.com/market/repor...es_Summary.PDF

mrjauk · #20 Posted **Nov 10, 2009, 10:45 PM**

Quote:

Originally Posted by Hed Kandi

The stories are countless, but yes I will share one.

A former roommate of mine has a very wealthy aunt and uncle. This aunt and uncle attribute their fortune to a successful factory in their native country where they employ dozens perhaps hundreds of workers.

Approximately 10 years ago this family moved to Vancouver and purchased a multi million dollar home in Point Grey. The aunt does not work but spends her time learning English and shopping, whilst the uncle makes trips between Canada and his native country to manage the factory.

After 5 years of living in Canada our government had granted them citizenships, thus deeming them Canadians citizens. Hence, it was not the "5% of wealthy foreigners" who purchased the property in Point Grey, it was 'Canadians' - or so reflects the statistics.

As Warren noted above, when the family purchased the property, they were foreign nationals, not Canadian citizens. The "rich foreigner" is a myth, ladies and gentlemen.