EA Announces Substantial Layoffs

by Jeff Marchiafava on Nov 09, 2009 at 10:09 AM

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.