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EA layoffs hit 1,000, Black Box 'consolidated'

By Tor Thorsen, GameSpotPosted Dec 19, 2008 7:24 am PT

[UPDATE 2] Publisher widens staff reductions to 10 percent, will reap $120 million annual savings; Need for Speed Undercover studio moving in with EA Canada, label will remain intact.

The day before Halloween, Electronic Arts spooked its staff by announcing it was laying off 6 percent of its workforce. Last week, it alarmed analysts by announcing--without revealing any specifics--that its annual earnings would fall below expectations. As a result, it was expanding its layoffs and canceling future projects.

Today, the company announced an expanded restructuring that will see EA increase layoffs to include 10 percent of its worldwide workforce. The 1,000 pink slips will be sent out by March 31, 2009, and will encompass the "consolidation or closure of at least nine studio and publishing locations," according to EA.

The restructuring will both cost and save money. After incurring charges of $55 million to $65 million as a result of severance packages and other reorganization-related expenses, EA anticipates an annual savings of $120 million.

Analysts blamed EA's troubles on the underperformance of several games, such as Mirror's Edge, Dead Space, and Need for Speed Undercover. Little surprise, then, that one affected location is Undercover developer EA Black Box, which will be closing its office facilities. (In an ironic footnote, Black Box's official site still bears the tag line "Growth...and lots of it!") The staff of the Vancouver-based shop, which is currently working on Skate 2, will be relocated to EA Canada's offices in the nearby suburb of Burnaby. However, an EA representative told GameSpot that the studio name will remain.

"This does not mean that the Black Box studio is closing," said the rep. "The studio is moving to our Burnaby campus to share the facility with EAC and other EA teams that operate out of our state-of-the-art facility. We will operate two distinct studios, each with their own distinct culture and teams, out of our Burnaby facility."

EA said that Black Box's expected move date is June 2009. The rep also said that the studio's games would follow as well, but declined to comment if any were being considered for cancellation. "[We've made] no announcements regarding franchises," stated the rep.

In the initial news release, EA also issued the following blanket statement outlining how it will examine each of its series' viability: "EA is implementing a plan to narrow its product portfolio to focus on hit games with higher margin opportunities. The company remains committed to taking creative risks, investing in new games, leading the industry in the growing mobile and online businesses, and delivering high-quality games to consumers."

301 Comments

  • world69star69

    Posted Jan 25, 2009 10:53 am PT

    People stop bashing black box...skate 2 just came out and is a gem of a game...flawless fun on ps3!!!! Just because one game comes out horrible like need4 speed doens't mean people should loose thier jobs. These people would be out on the street in a cold winter , it's not a good thing for anyone to loose their job. And the ecomomy can't be fixed if more people loose their jobs faster then products being bought. T It's just immoral for someone being happy about people loosing their jobs....really shows the age of some people here!

  • world69star69

    Posted Jan 25, 2009 10:48 am PT

    I can't believe the immaturity of some of you.... Nobody deserves to loose their job, no matter how much you don't like a game... Period. These people have families and some may be out on the streets in a cold winter...would you like that? I though not! Just because pro street sucked, doesn't mean that all their games are bad.... Hell I just got Skate 2 and I am loving every minute of it, even if ti was bad I wouldn't want them to loose their jobs... You have no idea how hard it is to get a job in the games market in the first place....which is why I stopped going down that career path...too much of a gamble, then you loose your job..not fun. EA was doing great this year..the games they brought out were original, like dead space, and mirrors edge. The problem is my country America is filled with instant gratification naive cheapskates who will only buy things they see advertised to hell like "Haloz" and "GEarz" both of which are overrated trash, but xbox fans buy that crap up while good innovative games don't get the time of day. We all complain about companies milking franchises so why do you not buy new ips? Why do you buy the same crap like gears over and over again? Come on now, we need new ips and original ideas...I really hope that EA doesn't revert back to being like Activision....it sucks EA makes a good move and bam they don't get any support from it.

  • codename-60091

    Posted Jan 14, 2009 3:49 am PT

    i am glad u are laying off the laser game developers. piece of garbage all they know is eat and sleep. no creativity at all. those video interviews in japan to create prostreet is a total waste!!!

  • the1stmoonfly

    Posted Jan 7, 2009 7:22 am PT

    EA need to get out of the mindset of make a game, sell it to make money, then move onto someting else. The most popular and biggest selling games have great online modes with excellent support in the form of game updates and DLC. I'm a 360 guy and my examples of this would be the likes of the CoD series, Halo, and Forza. BF2:MC seemed to be fixing this but it was only a glimpse that vanished. EA's single player games dont hold their own against the likes of Bioshock, Mass Effect, Oblivion, Fable 2 or even GTA which I didnt like. They also need to stop trying to get RTS games to work on consoles like they do on the PC because they just dont, which is why i no longer buy RTS games for anything other than PC. The ones I have only dissapointed. Ive played over 200 games and very few EA games ever got more than a few hours out of me. Their in lies their problem IMO.

  • StarlightHunter

    Posted Jan 5, 2009 1:34 am PT

    actually dead space was pretty good. they still have yet to make some decent dlc.

  • RoC1909

    Posted Jan 4, 2009 1:42 pm PT

    Well....maybe if EA made decent games they wouldn't be in the mess that they are in. Or how about this....quit with the extravagant buildings that they have to have their employees work in. Quit with the expensive trips to Cabo! Quit with giving employees a PERK everytime they do something that should be done in their daily work! Dump the game rooms and the stores and everything being free and be like 99% of the other companies and guess what?? EA wouldn't be in the mess that they are in!!

  • flips5114

    Posted Jan 3, 2009 10:04 pm PT

    what goes around comes around, its there own fault

  • Soul-gamer

    Posted Jan 3, 2009 4:20 pm PT

    Tough Times

  • hannify

    Posted Jan 3, 2009 2:43 pm PT

    they could well afford this....

  • MagicOneUp

    Posted Jan 1, 2009 10:38 pm PT

    Yes they should go one further and sack the rest of Black box team. NFS undercover was atrocious... my money spent regretted.

  • EXODYS

    Posted Jan 1, 2009 12:19 pm PT

    @Bakkoda24

    I'm definitely not going to flame your post, on the contrary First of, I agree that EA's misguided (and on some occasions illegal) use of SecuROM is also to blame for their poor number of sales. Many gamers have banned EA games for just this reason, so really a STUPID move from EA on this point. They wanted to increase their sale, and they experienced just the opposite...
    The reason why I'm blaming piracy as one of the main factors for EA's money trouble is this: When you look at the facts then more than 50% of all software, programs and games alike, in Asia is pirated. Now we have 1 billion people in India, and the same amount of people in China, not all of them have a computer, but still, you do the math... All I'm saying is that if most people would actually buy the game, instead of stealing it, game producers such as EA wouldn't have the same economic troubles as they have now.

  • the1stmoonfly

    Posted Jan 1, 2009 4:58 am PT

    For me the trouble with EA games is that they are either brain dead bames like NFS, an average movie tie in thats never going to re-define any genre, or yearly re-makes. They never seem to supply updates to console games and the original stuff usually has cheap AI and farily on rail gamplay ruining what would otherwise have had plenty of potential.

  • chris_assassin

    Posted Dec 31, 2008 2:31 pm PT

    this has really annoyed me as ea used to be my favourite game producer, much more than ubisoft. but now the only ea games i buy anymore are skate and lotr

  • salohcinborje

    Posted Dec 30, 2008 5:19 pm PT

    Slyven,

    Sadly, there new ips have been lax. Mirrors Edge was more of a gimmic then most gamers will deal with, Fun, origional. But not a game that many want to play, even with the cast involving Female runners and the ability to pop caps, it wasn't taken on well because it was a damn technology demo. And as for Dead Space, it was a fun game, with good atmosphere, but it wasn't god, it came out next to what.. Fable 2, and Fallout 3? Which are you going to buy a Proven game with a large fan base or a game were your just playing resident evil but instead of head shots is dismemberment. This can't all be blamed on Xbox Gamers, as really its a large company who has bastardized and destroyed games for years, making games that aren't that much better then the spam of yearly titles that they used to pump out. Remember this has happened before.. Companies making crappy games for so long that they lost all credibility, and the sad thing is.. There's no Nintendo Seal of Approval making sure this industry comes back.

  • Inconnux

    Posted Dec 30, 2008 3:13 pm PT

    EA has gone out of its way to piss off its main customers with its idiotic DRM strategy. I buy a lot of games but have boycotted any game that uses Securom. Smart move by moving games to steam though, Steam is DRM that I can put up with.

  • Bakkoda24

    Posted Dec 30, 2008 2:25 pm PT

    There is one obvious reason that EA has been doing poorly. They've been sticking SecuRom on every piece of software they release. Sales were so low with games like Spore that they removed the installation limit, after doing a recall. EA's past games have been big hits, but most of the ones have been no shows lately. And don't blame piracy. It may not be correct or even legal, but people buy games that they like. There is a difference between piracy and "torrenting". I test every game before I buy it. I don't want to pay 49.99 for a game that is riddled with bugs and broken gameplay. If anything it's a primitive form of advertising. I don't see Blizzard hurting from pirating or any other big companies. Only EA. This will teach them not to trash games to try and make them original (here comes another reference to Spore). Just like they robbed Will Wright's ideas during the making of Spore.

    And please, go ahead and flame my post all you want.

  • EXODYS

    Posted Dec 30, 2008 1:54 pm PT

    This is indeed a real shame. EA has been making some really good games in the past couple of years, especially the new Dead Space really took me by surprise. I believe it's unfair that a company which is actually improving in every aspect (more innovating games, treating their employees better and giving more freedom to their partners such as Bioware) has to lay of 10% of their workforce to survive. The gaming industry sure is unthankful at times. I wonder, will we ever stop piracy? I'm sure that would make it a lot easier for gaming companies to survive, but do the pirates care about that? Noooo, "50$ for a game, you've got to be kidding me, I can download it for free". Stop piracy! You're ruining the industry!

  • Gabez_R

    Posted Dec 30, 2008 6:25 am PT

    (im gonna be killed by a horde of gamers) My uncle owns EA in South Africa

  • wayanbros

    Posted Dec 29, 2008 2:50 pm PT

    @sylven

    They released original IPs and they lose money.
    Before they released sports games every year and generic stuff and they make money. hmm... the consumer's always right eh...

  • Slyven

    Posted Dec 29, 2008 7:56 am PT

    moan_z0ne, what the hell are you tlaking about?

    EA JUST started trying to realease some orignal IPs (like Mirror's Edge and Dead Space) all liked by the press media, and started programs like that deal to publish without signing on, maintaining Bioware's creative freedom (and the list goes on) and this happens.

    Frankly, no one can say EA is not trying, fact is the mass consumers (not to place the blame on Xbox 360 zombies, but they are hard to ignore) anything that doesn't let you kill something every 30 seconds and give you digital breasts to oogle at seems to be doing fairly poorly.

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