Electronic Arts Laid Off 10% Of Workforce As Part Of Restructuring
Electronic Arts revealed in a recent earnings call that the company has laid off around 900 employees. These jobs were rumored to be cut last month. The cut was confirmed by EA CFO Blake Jorgensen.
“Our cost reduction plans will reduce our overall headcount by approximately 10 percent,” said Jorgensen on the call. Jorgensen added that the restructuring plan and resignation of CEO John Riccitello ended up costing the company $15 million more than what they estimated in the most recent guidance.
Jorgensen said that the company is working towards a 20% operating margin, which is the goal that caused the layoffs. He did not say which divisions would be hit by the layoffs.
The company recently announced their Q4 earnings of $1.04 billion, which is a 6% increase from the same time last year. For the 2013 fiscal year, the company’s revenue increased 36%. EA’s new SimCity game hit 1.6 million copies sold since it launched in March. Around half of those sales were from digital downloads.
FIFA 13 was also a major success as it sold around 14.5 million copies during the fiscal year, which is a 30% increase from last year’s release.
The layoffs have costed EA around $16 million for the short term. In the earnings call, Jorgensen added that the company’s operating expenses for the current fiscal quarter was $540 million, including the underestimations of the restructuring costs.
This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry