GamesBeat

Electronic Arts burned by reports of impending layoffs

Electronic Arts has an internal shakeup in the works, according to several reports around the web today. While EA representatives claim that the world’s biggest games publisher is still on an even keel, the worst accounts claim that more than 10 percent of the company’s staff could be on its way out the door.

Startup Grind kicked off the story, citing unnamed sources within EA who say that between 500 and 1,000 employees are due to be laid off “very soon.”

EA quickly responded by not denying the reports outright but claiming that while some people may be leaving, the company still plans for net growth in employment by the end of 2012.

The full statement from EA’s American representatives reads, “EA is growing and looking to hire hundreds of people for our digital, console, mobile, and social games. Like all game companies, we make occasional adjustments to resize teams as projects are completed and new priorities are established. Overall, we expect that headcount will be up at the end of this year.”

EA sent a similar statement to the European trade paper MCV: “There are no lay-offs as such; we always have projects growing and morphing. At any given time, there are new people coming in and others leaving. EA is growing and hiring and building teams to support the growing demand for digital games and services.”

At present, according to EA representatives, the company employs approximately 9,000 people worldwide.

The reports, and EA’s responses, raise interesting questions as to which branches of the company might be losing staff and which might be growing. Startup Grind points out that while EA boasted of moving more than 2 million units of Star Wars: The Old Republic in its latest quarterly earnings report, the highly budgeted, massively multiplayer online role-playing game may still not be performing up to expectations. China may be a target for expansion as EA recently announced a partnership to bring its lucrative social-gaming version of The Sims to the Chinese market, where online and social gaming are vastly more popular than console and traditional PC games.

EA’s stock price fell by just shy of a dollar today, leaving it at $15.21 per share when the markets closed. Since peaking at more than $25 per share in early November 2011, EA stock has been on a steady slide.

Even the hint of layoffs isn’t the best news for EA, which has taken a number of blows on the public relations front recently. The embattled publisher beat out too-big-to-fail Bank of America to be dubbed the worst company in the United States a few weeks ago, and though its outward response was rather flippant, within EA the award may have left a mark.

Pulling back to look at the industry as a whole, rumors of restructuring at EA come on the heels of layoffs at other major publishers. THQ announced sizable layoffs and the downsizing of key projects early in February. Sega followed suit a few days later by cutting more than 500 employees and likewise trimming down staff on some of its in-development games. At the end of the month, Blizzard Entertainment let 600 people go amid news of contraction in the World of Warcraft subscriber base. Just a few days ago, Sony took the cake by announcing a massive restructuring and reinvestment effort that may see as many as 10,000 current employees let go.


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