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

[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.

  • MOAN_Z0NE

    Posted Dec 29, 2008 7:27 am PT

    Maybe when EA starts releasing some original and Glitch free games they will turn it around. Or maybe slowing down their Roster update of Madden every year.

  • Ardiendo_1

    Posted Dec 29, 2008 5:57 am PT

    @console-deity:

    PC games are a huge source of income and it is by far the cheapest platform to develop a game on. Of course PS3 games make money as well and it is in EA's (and other multiplatform developers) best interests for each console to be successful as it means they sell more games in the long run.

  • Skreb-Masters

    Posted Dec 29, 2008 5:52 am PT

    It's a shame that. EA start producing some original quality titles and then noone buys them. It just goes to show why they release annual sports titles and rehashed franchises year after year.

  • terror_ninja

    Posted Dec 29, 2008 12:48 am PT

    EA is like the devil of the gaming world...they screw every one around all the time

  • stewiegriffin20

    Posted Dec 28, 2008 9:44 pm PT

    Those cheap EA bastards pinch pennies and still fire 1000 people? If they spent less time deciding how to cut back on costs, and more time making good games perhaps they wouldn't be in this situation.

  • matty_sen

    Posted Dec 28, 2008 4:22 am PT

    EA sometimes have great games and great concepts but I absolutely f**king hate it when they make games extreme "businesses". Businesses circumstances are bull when you look for what the gamer wants instead of what will sell. Recurring familer francies and generic tie in's sell like ass cake to the dumb asses of gaming like those who just go out and by what looks good on the cover, and 8 year old's who want the next sh***y pixar tie in on the market. Its honestly selling out!

  • world69star69

    Posted Dec 27, 2008 10:43 pm PT

    These companies need to STOP putting out all their games out for the holidays. Every year is swamped with games for x-mas, but you hardly get anything during the summer- when you have more time to game...why is that? It makes no sense. Just because people buy games as gifts does that mean they don't the rest of the year? This is the problem and this year was worse than most! Especially with the Economy problem. Hell GTA4 came out in APril = Multiplatinum selling game, MGS4 came out in June == Multiplatinum Game, Soul Calibur 4 came out in July == Multiplatinum game....see the trend...when there is 30 games on console, pc and handheld, when people have multiple systems in a recession, not every game is going to be bought... This is the problem!! Spread those games out then gems like Mirrors Edge and Dead Space will get more sales. The worst thing about this is that Dead Space and Mirrors Edge were the most refreshing creative games from EA in a long time. Now they will go back to just spewing out madden clones, nfs remakes and movie cash ins....its very very sad!!!! I hope they don't but knowing stockholders and corporate greed...it's very likely an end to the new ea and back to business as usual.

  • world69star69

    Posted Dec 27, 2008 10:26 pm PT

    console-deity you really need to keep quite... Your idea is to not make pc games or ps3 games.... those are the only non-handheld platforms I use. Why would you deny 18million ps3 owners and 100+million pc owners the games? EA has switched to making ps3 versions first so they can then port to xbox, the result is both versions are better for it. PS3 actually sold more games for EA then xbox did this year... I can't stand xbots like you who just want to keep putting money in billy gates pocket... what do you get out of it? I am offended that someone would even suggest to get rid of pc and ps3 productions.... What would you say if i said stop making 360 games? You see how that sounds?

  • The_InJimid8tor

    Posted Dec 27, 2008 6:34 pm PT

    Sad to read of layoffs or closures by any Game Company.
    But I agree with some here that mentioned they haven't made a good new refreshing Need For Speed Racing game since Underground 2 and most of there online interfaces suck wind! But Gamespy's Hot Pursuit 2's online is still up and running fine all these years later! Simple and fun! LOL!
    One thing that angers me is they will shut down the servers on a new game in a couple years so they make you try to buy the latest rendition of the series. Undercover was better than Pro Street but to much like Most Wanted.
    It all looks to much the same and is boring.Yaaaaaaawn.....
    So back to Test Drive Unlimited and Flatout Ultimate Carnage with maybe some GRID thrown in.
    I've said it before to the developers and employees but falls on deaf ears and blind eyes.
    Make a refreshing version with new HD graphics on the idea of High Stakes/Hot Pursuit 2 and Underground 2 and you will have a sure winner.

    I'll bet the next rendition if there is one will be worse anyway...
    But many seem to be slipping in that department lately!

  • Subcritical

    Posted Dec 27, 2008 3:39 pm PT

    Dear residentzombie2,

    Blaming democrats for raising taxes in NY? Yet the new Yankee Stadium gets funding publicly?

    Maybe the richo Republican's that own the Yanks use their own money? I mean, they just spent almost a half BILLION dollars on three players! And let us not forget many ball players are Republican and they belong to a socialized idealology: MLB Players Union which happens to be the MOST POWERFUL UNION IN AMERICA! Way to go Republicans!

    Anyway.....this news from EA is a result of corporate greed, and this is the real root of America's problems in this day and age.

    Making a profit isn't enough. They must make mega-profits to pay off the investor money they took up front when the coroporate suits gave themselves up-front bonuses. And who pays in the end? Creative individuals and gamers.

  • console-deity posted Dec 27, 2008 8:17 am PT (does not meet display criteria. sign in to show)

    console-deity

    Posted Dec 27, 2008 8:17 am PT (hide)

    There are three parts to this problem: 1 EA is still trying to waste money on PC gaming, 2 rushing games to the printing press before they have been given the proper amount of polish hurts sales, 3 focus less on graphics and more on game play, when I was a kid games not only lasted longer but had more to do in them because they didn't waste a lot of resources on graphics. Oh and give up on making PS3 versions of games as the development costs far out weigh the returns.

  • Desertdback

    Posted Dec 27, 2008 4:37 am PT

    Whirly couldn't be more right! Why the hell these publishers cram the best games in the last two months is beyond me. I know its for Xmas shoppers, but students get 3 months in summer off did they ever think of releasing a few big name games there or any other time ???

  • toadman682000

    Posted Dec 26, 2008 5:31 pm PT

    Whenever I hear black box I immediately think of the canned game package that was to include HL2:EP2, TF2 and portal.

  • jedrus

    Posted Dec 26, 2008 1:12 pm PT

    O.K. EA, that does it, for laying off those poor dudes I am laying you off from my shopping list. May not be much but it is a start.

  • AzuriX

    Posted Dec 26, 2008 7:26 am PT

    Zoomer30

    Please tell me how a DRM that limits a person who BOUGHT a game to like 3 installs is a great idea? How does that stop the pirates who already have the game up for download on the net? Why should honest people who actually buy the game be treated like they are thieves? You my friend need to give your head a shake.

  • Solid_Acid

    Posted Dec 26, 2008 3:15 am PT

    They just need to take ther time developing the next NFS (if there is one coming) and make sure its not rushed. There hasn't been a decent NFS game (despite the fact that I LOVED NFS Carbon) since Underground 2. I still have hope that one day NFS will hopefully re-capture the glory of the previous NFS installments.

  • Whirly

    Posted Dec 25, 2008 10:51 pm PT

    It might help if they spread game releases throughout the year instead of releasing a glut of them at christmas. I bought 20 odd games in November/December - all of them highly rated - I doubt many people can afford that all in one hit. I know publishers say that xmas brings them the best sales, but surely there is a limit to the number of games the market can support in one go?

  • mattdv

    Posted Dec 25, 2008 9:29 pm PT

    Yeah, King_Louis51, me too, but the thing is people keep buying them, so that's where the easy money is...

    Of course, I don't hold it against them; I'm sure those steadier revenues help keep them stable enough to take risks with stuff like Mirror's Edge.

  • King_Louis51

    Posted Dec 25, 2008 6:01 pm PT

    It's a real shame that this is happening to EA just as they start producing original, quality IPs. Dead Space was stunning and Mirror's Edge was worthy of attention.

    I'd way rather they layed off creating Madden 2010, NHL 2010, FIFA 2010 for JUST ONE YEAR and made some more quality IPs. They could offer updated rosters and stats through a download, there's no need for a full $60 game anyway. Madden 2010 is almost identical to Madden 2003... the same goes for all their other yearly franchises (except maybe FIFA, that's picked up a lot of steam since FIFA 07).

  • LysanderNaFaile

    Posted Dec 25, 2008 3:25 pm PT

    EA has developed and earned a reputation as being more about the bottomline than creating truly brilliant games. Whilst my sympathies to those losing their jobs, you have to laugh as EA finally reaps its reward for providing 2nd rate products at full price.

  • jdknight21

    Posted Dec 25, 2008 11:07 am PT

    If some of the employees had been given more time to polish their games this may have not happened. I've heard some employees were very vocal about DRM, also. The wrong people are probably suffering due to poor management. Remember the product, not the stock price or making a holiday date EA (and Ubisoft).
    There aren't many people like me willing to suffer through future DRM issues just because they care about the little guy getting their money or keeping their job. The keyword is 'suffer'. A valued consumer should never have to because of your product.

  • ubershank47

    Posted Dec 25, 2008 5:46 am PT

    Zoomer30 almost all the people who complain about DRM BOUGHT THE GAME! DRM caused them (like myself) problems with playing the game smoothly, otherwise no one would have complained if there was no problem with it. Consumers don't want to be treated like a potential criminal especially if they are supporting their favorite franchise. Disapproving of poor business ethics doesn't make one a criminal.

  • SonicX_89

    Posted Dec 25, 2008 3:21 am PT

    I hope Bioware and Pandemic won't be affected. If EA messes up and Mass Effect 2 is altered in some way, I'm going to be real pissed. On another note, I wonder if Microsoft ever considered buying Bioware.

  • Raphal

    Posted Dec 24, 2008 9:22 pm PT

    Thank God!!! Even though 1,000 is nothing compared to the mighty large numbers of minds they control. Hopefully it gets worse for them. I'm sick of the EA monopoly.

  • shani_boy101

    Posted Dec 24, 2008 6:15 pm PT

    Cancel Skate 2 and die, stop owning and governing Crytek and other great game developers and i'll be happy.

  • Zoomer30 posted Dec 24, 2008 4:14 pm PT (does not meet display criteria. sign in to show)

    Zoomer30

    Posted Dec 24, 2008 4:14 pm PT (hide)

    I love it how people blame the companies for DRM....in my mind we need to blame the people who STEAL GAMES for DRM. Don'T Steal Games = No DRM. The only people who whine about DRM are the ones who think its their God given right to steal games whenever and how ever they want. But whatever, most logical points about DRM are lost on people of that ilk.

  • Nokoryous

    Posted Dec 24, 2008 10:57 am PT

    i wonder if the laid off employees will be buying their kids the video games they want next christmas...

  • p8riot08

    Posted Dec 24, 2008 10:11 am PT

    This is what EA gets for putting out uninspired and weak games each year. EA pretty much makes the same games year after year and the DRM issue hasn't helped them either.

  • frmld posted Dec 24, 2008 5:32 am PT (does not meet display criteria. sign in to show)

    frmld

    Posted Dec 24, 2008 5:32 am PT (hide)

    their is nothing wrong with ea its an ok company not amazing and not crappy.

  • willripyouanew1

    Posted Dec 23, 2008 4:29 pm PT

    Oh how the Mighty have fallen

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