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EA Announces Substantial Layoffs

What EA gives with one hand, it takes with the other. Hot off the company’s confirmation of its $275 million acquisition of Playfish (makers of the free to play Facebook games, Pet Society and Word Challenge), EA has announced considerable cuts to other studios in its quarterly earnings report.

Gamasutra reported earlier today that layoffs have taken place at several EA studios, including EA Redwood Shores, EA Tiburon, Black Box, and Mythic Entertainment. Some now ex-employees have been tweeting their woes, describing the layoffs as “HUGE chunks of EA,” and “about 40% of [Mythic Entertainment’s] employees.”

EA has now confirmed the layoffs, which total 1,500 employees. The decision is expected to save the company $100 million annually, and was made in light of the $391 million the company lost this quarter alone. CEO John Riccitiello had this to say about the layoffs: “We are making tough calls to cut cost in targeted areas and investing more in our biggest games and digital businesses."

While layoffs aren’t exactly unheard of in this economy, EA’s purchase of Playfish must make the decision harder to swallow for those left without a job. What do you think? Is EA’s decision to buy a social game publisher a good move, or should they have used that money to support their internal studios for the next three years? Let us know in the comments section below.

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Comments
  • Wow, that's terrible. They laid off that many people just for some facebook dev? I like the new EA, but something like this is just impossible to support.

  • Let's just say that they've never been considered for my 401k portfolio.  I feel for the employees, though.

  • This is infuriating. Just when EA was starting to really create some memorable titles, they have to go and acquire some garbage social-networking game developer at the cost of developers from studios like Redwood, who created Dead Space. I'm not surprised by layoffs at Mythic, considering Warhammer didn't do that great, but still, this is awful. The casual market already has plenty of shovelware.

  • All of that for an indie facebook dev?

  • This is just wrong..

  • EA is retarded

  • They should have left the buy alone, I don't see how they'll make money on the aquisition in any way. They need to focus more on their internal networking instead of buying out. They're gonna get to be like companies that have such an evelated ego that they may eventually flop. Bad move in my opinion.

  • They should break up back into the many development teams they absorbed.  The teams were better by themselves and didn't have to worry about getting their employees cut when an overall conglomerate doesn't work out.  *cough* Bioware *cough*

  • Seems to be a common story nowadays, and a sad one at that. Especially so close to the holidays

  • why would ea fire 1500 people to buy some free to play facebook game developer?

  • All of you bashing this:

    Have you seen how many people play those games? Sound decision in my book. Untapped markets for the win.

  • EA is going downhill. Thats just stupid to buy a free game on facebook and make over a thousand people suffer because of it. Companies like this only hurt the economy.

  • i feel bad for those employees, but business is business

  • boooo!!!!

    this means less games!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  • As someone who was laid off by a residential homebuilding giant I have some insight to what those 1500 employees are feeling right now.  3 months before my layoff, which included 2500 other employees nationwide on that same day, the company I worked for spent $850 million rebranding their logo.  I also watched our CEO and other presidents of this and that buying and selling millions worth of our companies stock.  

    One of the bad parts about working for a huge company is that you really just an expendable asset like a stapler.  Companies as large as Electronic Arts should realize that their actions and decisions have a direct effect on the economy that we are all living in.  The decision-makers at EA should be ashamed of themselves.  Although I seriously doubt their CEO is losing any sleep over the 1500 former employees that were cut loose.

  • Staff

    I should point out that EA didn't layoff 1,500 people to buy Playfish. The layoffs were to stop the financial losses the company has been suffering recently. The purchase of Playfish is, as Elliott Johnson pointed out, to reach a new demographic. Whether or not it's the right move remains to be seen...

  • With all the companies that EA is scooping up (e.g., Bioware and company), I can't say I'm surprised.

  • Jeff: Exactly. I'm not saying it's a good or bad decision. Just that it's a solid business move because it's an untapped market. I can't imagine how much money PlayFish makes from selling their premium access items and what not.

    Also, thanks for pointing out that the lay offs weren't a direct relation to the purchase.

  • No matter how many good games EA makes, things like this are unforgivable. Period.

  • Thats really stupid, but they apparently have to do it, but I feel sorry for those people.

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