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EA: "Small number" of staff affected by restructuring

Licenses and dev contracts to be refined in packaged goods business; "not a major personnel reorganisation" confirms CFO

Electronic Arts has calmed fears of major staff layoffs, stating that the restructuring announced today will only hit a small number of personnel.

The publisher is expected to incur costs of up to $180 million as it reorganises its packaged goods business, with plans to renegotiate contracts with developers and ditch some licenses it owns the rights to.

"We announced a plan to restructure key licensing and development agreements to improve the long-term profitability of our packaged goods business," said CFO Eric Brown in a conference call to investors.

"While some employees are impacted by this restructuring it's a relatively small number, this is not a major personnel reorganisation. We are continuing to hire in selected franchise teams and in our digital business," he added.

Last week EA laid off an estimated 100 employees in Canada, with the decision blamed on the seasonality of game releases.

The move sparked concerns that the publisher could be making wider, sweeping layoffs after axing 1500 jobs in 2009 and dropping 600 positions around the same period in 2008.

But Brown tonight indicated the restructure was a house cleaning exercise, updating the business for a market that has changed significantly during the current generation of consoles and digital devices.

"With these actions there is no significant overall change in the total payments for licenses and contracts," said Brown. "We are for a large part setting aside rights we won't be using."

He continued: "There are other contracts that are being negotiated that do not qualify as part of this restructuring. While we won't discuss the details of any one deal, we are addressing structural issues on contracts that were signed years ago under significantly different market conditions."

Brown also confirmed that NBA Elite 11, previously in the works at EA Black Box in Canada, has been cancelled, with development duties for next year's iteration handed over to Madden and Tiger Woods studio EA Tiburon.

The publisher announced earlier that it had beat expectations for the second quarter, with adjusted sales of $884 million, halving losses to $201 million.

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Latest comments (2)

Andrew Goodchild Studying development, Train2Game10 years ago
If EA isn't going to revive the Desert/Jungle/Urban (let's forget Soviet) Strike series, maybe it could ditch that licence to someone who wants to make it.
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Alfonso Sexto Lead Tester, Ubisoft Germany10 years ago
"Number" is all that EA understands. The "Small Number" is "all the numbers" for the people fired.

The people affected by this should not be the lower employees, but some people inside marketing division because, let's be honest; who had the idea of releasing "Need For Speed World", a PC exclusive online game, the very same day Starcraft 2 is released?
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