Business

Thursday November 12, 2009

Video-game giant EA to cut 16% of jobs


NEW YORK: US video-game giant Electronic Arts posted a net loss for the 11th consecutive quarter on Monday and said it was cutting 1,500 jobs, or 16% of its workforce.

EA reported a net loss of US$391mil in its fiscal second quarter which ended on Sept 30, compared with a net loss of US$310mil a year earlier. It said revenue rose 2% in the quarter to a record US$1.147bil behind the launches of “FIFA 10,” “Madden NFL 10,” “The Beatles: Rock Band,” “Need for Speed,” “SHIFT” and “NCAA Football 10.”

The video-game publisher said it was cutting some 1,500 jobs as part of a plan to “narrow its product portfolio to provide greater focus on titles with higher margin opportunities”.

It said the plan, expected to be completed by March 31, 2010, would include the closure of several facilities and would result in annual cost savings of at least US$100mil and restructuring charges of US$130mil to US$150mil.

EA announced earlier on Monday that it had acquired London-based social network game-maker Playfish in a deal that could be worth up to US$400mil.

EA said it had bought Playfish, which makes games for Facebook, MySpace and other social networks, for US$275mil in cash and US$25mil in equity retention arrangements for employees. In addition, EA said it would pay up to US$100mil if the privately held Playfish reached certain performance milestones through Dec 31, 2011.

“EA is performing well, with quality, sales and segment share up so far this year,” EA chief executive John Riccitiello said in a statement. “We are making tough calls to cut cost in targeted areas and investing more in our biggest games and digital businesses.” — AP

EA shares gained 1.02% to US$19.73 in after-hours electronic trading. EA gained 2.79% on Wall Street during the day following the announcement of the acquisition of Playfish. — AFP

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