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View Full Version : Electronic Arts to lay of 6% of job force


frogspasm
10-31-2008, 02:31 AM
Bummer:

http://biz.yahoo.com/ap/081030/earns_electronic_arts.html?.v=12

"The job cuts will amount to between 500 to 600 positions across all functions and locations, EA said. While some of these jobs are open, most will involve layoffs. The company said it expects about $50 million in annual pretax cost savings as a result."

DuttyFoot
10-31-2008, 02:38 AM
wow, the downturn in the economy is really hitting everyone where it hurts.

The company lost $310 million, or 97 cents per share, in the quarter, the second in its fiscal year. That was worse than the loss of $195 million, or 62 cents per share, a year earlier.

That sounds like some serious losses

notlongago
10-31-2008, 05:09 AM
"The company said it expects about $50 million in annual pretax cost savings as a result.""

Hmm so one person costs them around 100.000$ (500 people roughly)?

On the other hand I thought economy was doing well. I remember couple months ago that the head of federal reserve was swearing by that economy was darn good and recession unlikely.

Pthomas
10-31-2008, 06:12 AM
Who knows... (http://www.visualizingeconomics.com/2008/10/26/compare-12-bear-markets-using-sp-500-aug-1929-oct-2008/)

anoon
10-31-2008, 12:00 PM
Hmm so one person costs them around 100.000$

Actually, $100k/employee is a little low, but yes, that figure is in the ballpark.

Besides salary, consider the cost of equipment, software, rent, electricity, benefits paid by the company and so on, and that's roughly what a company spends on an employee per year, on average.

SergioSantos
10-31-2008, 12:42 PM
I bet they cut off the junior workforce...
when they should look at the senior and manager positions...

DuttyFoot
10-31-2008, 01:18 PM
I bet they cut off the junior workforce...
when they should look at the senior and manager positions...

sometimes the employees with less years at the company are laid off, and other times its the seniors because of the rate of pay.

Aluuk
10-31-2008, 03:25 PM
I bet they cut off the junior workforce...
when they should look at the senior and manager positions...

This mindset will begin to change as you transition into the more senior positions. It's a horrible situation when anyone has to be let go, no matter the experience level, or salary.

Obviously the people that should be let go are the people that were responsible for the poor choices that caused the loss in revenue. Those decisions do not usually rest in the hands of the artists, so it's always horrible to see them get the short end of the stick.

hanskloss
10-31-2008, 04:27 PM
"The company said it expects about $50 million in annual pretax cost savings as a result.""

Hmm so one person costs them around 100.000$ (500 people roughly)?

On the other hand I thought economy was doing well. I remember couple months ago that the head of federal reserve was swearing by that economy was darn good and recession unlikely.

The head of FED doesn't know which end is up. The federal bailout is a prime example. He's either abandoned the fundamental principles of free market economics or has been paid handsomely by someone.

Delucubus
10-31-2008, 05:25 PM
Our economy is definitely not doing well, whatever tv or radio try to tell you.

And I wonder how many of these lay offs might have been freelance people, or contracts that were just at their end.

notlongago
10-31-2008, 07:02 PM
Generally those people who are fired are just victims of bad desicion makers of past. And generally speaking those who make those bad desicions and bad plannings were never fired or lost a job because those are the ones who decide who to lay off.

I hope that the people who oppose unions take a good lesson from examples like this. (Gussing that EA does not let workers to be part of any union)

Per-Anders
10-31-2008, 07:28 PM
Generally those people who are fired are just victims of bad desicion makers of past. And generally speaking those who make those bad desicions and bad plannings were never fired or lost a job because those are the ones who decide who to lay off.

I hope that the people who oppose unions take a good lesson from examples like this. (Gussing that EA does not let workers to be part of any union)

Now while I'm not suggesting that those being laid off did anything other than a great job or that this is anything other than massively unfortunate for all those affected, exactly where do you show/demonstrate that what you're saying is the case or the truth in this instance and that unions would be the answer?

Taking advantage of this to piggyback your issues on this isn't exactly sensitive. Making it so that anyone that argues against the chip on your shoulder looks like an ass by turning it into an "if you disagree you're calling those that got fired incompetent" argument is unacceptable, all the more so because the link you make is flawed and there's simply nothing to back it up apart from taking advantage of peoples own grief at having been laid off.

notlongago
10-31-2008, 07:38 PM
Well, unions would give you some legal backing and legal powers in case you are put in a bad position in which you cannot defend yourself. Now tell me what rights do those 500 people have at this point? Hiring an expensive lawyer and try to bring EA on kneels? You call the situation an unfortunate event. I call it a massive planning mistake in which the planners should be fired first.

Obviously you have not been victimized before. You are the one who is bringing your piggyback issues on to the table. What I suggested was some form of coverage and solution. Yes my solution was unions. What is yours?

I am not part of any union at all. But to me unions would be a good solution to game workers. Having unions could also regulate the job market in a positive way, provide decent hours and decent pay where companies cannot take advantage of people.

DePaint
10-31-2008, 07:55 PM
Generally those people who are fired are just victims of bad desicion makers of past. And generally speaking those who make those bad desicions and bad plannings were never fired or lost a job because those are the ones who decide who to lay off.

The game industry has treated PC gamers pretty badly lately. DRM. Mandatory net activation. Buggy releases. Console to PC port issues.

None of this is really excusable in a product people pay hard cash to use.

While I agree wholeheartedly that the ultimate responsibility for this lies with the executives and business owners that choose to run with this kind of consumer unfriendly model, game artists do profit from it as well and do form the cogs that keep this machine rolling.

Does someone deserve to be fired just because they work for the 'wrong kind' of business?

Probably not. But that's the only way companies that don't have an ethical or consumer friendly business model are held accountable.

By shrinking, fragmenting, being taken over by a better run company or failing and fading away entirely.

It sucks for the people who got fired. It really does. I'm sure a lot of them are jolly good people.

But the alternative is that companies with the most ruthless business model just grow larger and larger and that their mode of doing business disadvantages more and more paying customers.

That's bad for everybody involved.

Per-Anders
10-31-2008, 08:15 PM
My solution is no solution here, there is none as this is a victim of the economic downturn as a whole, EA are cutting jobs because I assume they simply can't afford to keep them, the people that made the wrong decisions are the banks and the thousands of people that took our mortgages that they simply couldn't afford as much as anything else, we simply don't know the whole circumstance behind this all, and it's sad because EA have been really putting out some great products recently, which shows at least some good management decisions have been made. A union would not help there (you think a strike would really keep those jobs?).

With regards have I been victimized, what kind of question is that? Everyone has been the victim of irrational prejudice at some time, of course I have, but I don't subscribe to victim culture, sorry, it's just not a recipe for success no matter what your background. If you do then this isn't the industry for you because it's largely meritocratic.

Where do my views on unions come from? My wife, she's spent the past 20 years failing to be represented by her union, working for government and watching her union work against her own interests consistently, against meritocracy, wasting her money on supporting political activities that had zero to do with her or the jobs of those that it allegedly represented. Like all organisations and groups unions about about themselves, unions are about unions, not about the workers they're meant to represent. Go watch "I'm alright jack" for a sadly still accurate portrayal of union and wealthy management.

Frank Lake
10-31-2008, 09:17 PM
The head of FED doesn't know which end is up. The federal bailout is a prime example. He's either abandoned the fundamental principles of free market economics or has been paid handsomely by someone.

It's very well known that it's NOT his bailout plan, but the House & Senate's. Besides the problem is on he inherited from Greenspan who dropped the ball to begin with. It all starts with the bleeding of millions of jobs to other countries and it finally hit the critical point and toppled over. When a country doesn't produce a enough products IN country then it's fails because it can no longer buy the products that it imports.

BOT...

This is just the start of lay-off's for EA & others because the US Recession has just started. So get those traveling VISTA's ready because you may only be able to find work in another country, simply because the US market will be full of those looking for work.

lebada
10-31-2008, 09:58 PM
Well, unions would give you some legal backing and legal powers in case you are put in a bad position in which you cannot defend yourself. Now tell me what rights do those 500 people have at this point? Hiring an expensive lawyer and try to bring EA on kneels? You call the situation an unfortunate event. I call it a massive planning mistake in which the planners should be fired first.

Obviously you have not been victimized before. You are the one who is bringing your piggyback issues on to the table. What I suggested was some form of coverage and solution. Yes my solution was unions. What is yours?

I am not part of any union at all. But to me unions would be a good solution to game workers. Having unions could also regulate the job market in a positive way, provide decent hours and decent pay where companies cannot take advantage of people.

having unions also has destroyed the automotive sector and the public transit sector here. then when those people get fired they're left saying "wut...wut happened?"

being paid $35 an hour to collect tickets in a booth and 100k a year in overtime is what happened.

Unions can be a bane of a company AND their employees, not the saviour.

lebada
10-31-2008, 10:00 PM
It's very well known that it's NOT his bailout plan, but the House & Senate's. Besides the problem is on he inherited from Greenspan who dropped the ball to begin with. It all starts with the bleeding of millions of jobs to other countries and it finally hit the critical point and toppled over. When a country doesn't produce a enough products IN country then it's fails because it can no longer buy the products that it imports.

BOT...

This is just the start of lay-off's for EA & others because the US Recession has just started. So get those traveling VISTA's ready because you may only be able to find work in another country, simply because the US market will be full of those looking for work.

its one of those..importing more than exporting type deals that went really bad. the far reaching point is that US's monetary power has, unfortunately, been adopted worldwide and thus has struck far more than it should've in the first place.

c'est la vie.

notlongago
11-01-2008, 02:27 AM
I was having a conversation once with a friend about economy and stuff in general. He was pro pro business(not that I am against business). I asked him if he had a job. He said no, I asked him if he had health care, he said no. it seems like, that is the level of brainwashing that some people went through.

Now, probably what killed the otomotive industry was the American consumer`s hunger for cheaper and cheaper cars. Please do not write to the bill to those of us who work very very hard to have a decent life. I myself never had an opportunity sit in a booth to collect tickets and make 35 an hour. But I have seen people at game companies who just talk bullshit, pretend that they have a vision, pretend they are are the coolest people around and make over 100k year. But those are the ones who never loose a job because they are also so good at visibility.

There is nothing in the system to protect hard hard working decent people. Yet you people are for business protectionism and you are against the only form of possible legal protection and backing hard working people might have at their jobs.



Also if you fill the union managements with the kind of bullshitting people then yes unions are bad. it is all about human quality no matter where you are, who you are with.







having unions also has destroyed the automotive sector and the public transit sector here. then when those people get fired they're left saying "wut...wut happened?"

being paid $35 an hour to collect tickets in a booth and 100k a year in overtime is what happened.

Unions can be a bane of a company AND their employees, not the saviour.

wonderpup
11-01-2008, 09:37 PM
Unions can be a bane of a company AND their employees, not the saviour.

The problem with this line of thought is that the logical endpoint is to outsource the jobs to cheaper countries and sack the workforce. If maximum profit is the only criteria applied to jobs in the west, we are looking at mass unemployment and/or a massive drop in living standards.

Whats funny to me is that the US is the most blatently patriotic country I know of- with flags everywhere- but when it comes to protecting the interests of the american people, the US corporations are falling over themselves to outsource jobs and cut wages- not able to figure out that when the last job is outsourced and the population is living on poverty wages there will be no one left to buy their products- and they will go bust. Funny stuff.

DuttyFoot
11-01-2008, 09:54 PM
So get those traveling VISTA's ready because you may only be able to find work in another country, simply because the US market will be full of those looking for work.

the us market is already full of people looking for work. thats why some people who finish school dont get into a job in there field when they complete school, and some do. it really sucks. think about it there are thousands of students who graduate on a yearly basis. so when you lose a job or are looking for work you have to compete with all those people. at least the people at EA have experience, so they should be able to get another job quickly.

switchblade327
11-02-2008, 10:30 AM
I don't want to trivialize this news but does anyone remember what life was like at big publishers before the crash?

An article from Kotaku, October 2007:
EA confirms layoffs as "somewhat routine" (http://kotaku.com/gaming/you.re-fired%21/ea-layoffs-confirmed-as-somewhat-routine-315243.php%20)

Seasonal layoffs at big publishers (or any publicly traded corporation for that matter) suck but they're nothing new either. Granted 600 is a lot more then usual and I'm not pretended the economy is in good shape but let's not forget we had problems before the economy tanked as well.

The fact is, publishers laid people off and it was hard for students to break into the industry last year too. Anyway, I hope everyone lands on their feet. I know at least one person in that 600 and probably others.

This is just the start of lay-off's for EA & others because the US Recession has just started. So get those traveling VISTA's ready because you may only be able to find work in another country, simply because the US market will be full of those looking for work.

Those of us who already have our "vistas" have been holding our breath, watching the dollar get stronger (read: not fall as fast) against the other major western currencies like the pound and the euro, effectively losing a pretty significant chunk of our salaries.

There are plenty of reasons to live abroad and if things get really bad, I'll be pretty damn happy to be in a "socialist" country. But failing to acknowledge that this crisis is truly global would be a mistake. Move to a farm off the grid somewhere if you don't want to feel any repercussions.

richcz3
11-03-2008, 04:34 PM
Publishers that were looking ahead about the economy were already starting to prepare for the current crisis. The general downward economic signs which started in earnest in July/August of 2007 and impacted the general holiday sales of 2007 set the tone for 2008. Seemingly not affecting the gaming sector.

2008 saw a banner year in games sales (overall combined) - and all the talk by financial analysts saying the gaming industry is "Recession Proof" gave people false hopes - How many game development studios were shuddered in 2007/2008 by EA and Microsoft alone? Most analysts don't take lost jobs in studio closures into account but the performance of said companies reducing expenses trying to maintain their quarterly profit targets.

I think MS and EA (fiscally) were planning ahead of the curve with EA coming up short and needing to cut deeper. We are now entering into a Global Recession so I think getting working Visas isn't really going to radically change ones work outlook. 2009 is going to be a year of bloodletting.

UPDATE - THQ Closes five Studios (http://kotaku.com/5075080/thq-shuttering-four-to-five-studios-including-paradigm-juice)

DuttyFoot
11-03-2008, 08:25 PM
UPDATE - THQ Closes five Studios (http://kotaku.com/5075080/thq-shuttering-four-to-five-studios-including-paradigm-juice)

wow, the cut deepens. now that really sucks, all those people.

switchblade327
11-04-2008, 05:55 AM
wow, the cut deepens. now that really sucks, all those people.

From Kotaku:
"Gone are: Paradigm, Helixe, Locomotive, Sandblast Games and Mass Media."

First off, my condolences to anyone affected by this cut. It sucks and I hope everyone lands on their feet.

That said, have you even heard of these studios? "Juiced" and "Stuntman: Ignition" are the only current titles affected that I've even heard of. It's possible, with the end of the fiscal year that these studios just weren't making money. THQ seems to have a big hit with Saints Row 2 but have they had any other big breadwinners this year?
Likewise with EA: other then Madden, Bad Company and Dead Space, what blockbusters have supported their 10,000 staff this year?

Again, I don't want to trivialize jobs lost, downplay the economic crisis or make any claims of "recession-proof" anything. But for the game industry this kind of news isn't something new, except the cuts are wider then usual scope. Anyone working in games is used to layoffs and studio closures (including many with much bigger names then these) affecting friends and co-workers if not themselves. It happens EVERY YEAR, since long before 2007. It's sad and it sucks but it's par for the course.

It's easy to get into a downward spiral of "Baby cries; experts blame economy" mentality and it's neither accurate nor healthy.

simoncheng
11-04-2008, 05:27 PM
this is really a bad news..

:(

richcz3
11-04-2008, 06:33 PM
Keep in mind that the current Credit crisis cannot be understated.
Banks are not lending to banks let alone, more importantly to well established businesses that need development or resource money.

A publisher pays for development of a title but a Publisher can't sustain a developers entire operations. Lack of credit is slowing if not killing many business that operate like this (ie: Auto Industry) where suppliers financial resources are being depleted. Inflation coupled with no credit chokes a developers means to sustain operations outside of their development obligations. From a Publishers stand point, there is essentially no choice but to cut them free and cut the losses.

This is not business as usual. This is hurting well established competent business and their work forces. So the first step most are forced to do is layoff staff to the bare essentials. Add to the growing unemployed glut (Los Angeles 8.5% unemployment). Factor in consumer confidence (in spending) is at record all time lows (no surprise) and banks are getting even tighter. Here in the states - consumer spending supports 3/4 of our economy. It's a vicious circle.

switchblade327
11-05-2008, 06:43 AM
A publisher pays for development of a title but a Publisher can't sustain a developers entire operations. Lack of credit is slowing if not killing many business that operate like this (ie: Auto Industry) where suppliers financial resources are being depleted. Inflation coupled with no credit chokes a developers means to sustain operations outside of their development obligations. From a Publishers stand point, there is essentially no choice but to cut them free and cut the losses.

One more time, I am not trying to understate the current crisis. As an American working overseas, I've seen my salary is USD take a serious nosedive.

But I don't think what you're saying is entirely accurate. The studios closed were publisher owned and a developer's entire operations *are* sustained by them. But most publishers DO have the money to fund development. The gross inefficiencies of the way that games are developed make the process far more expensive then it needs to be and the financial crisis is being blamed instead of the process. From what rumors I've heard and knowing how it goes, EA had a whole lot of fat to be trimmed.

If there was no choice but to cut them free, the studios cut would be ones we've heard of. And we'd be seeing the same layoffs at Ubisoft, ActiBlizzard, Midway, Sony and Nintendo. Which is why I say cutting studios that aren't profitable absolutely is business as usual.

The auto industry comparison is good because we're talking about the big three American car companies, who's been selling dubious-quality dinosaurs instead of keeping up with the times (this is not a personal bias; I own two American cars). While I doubt business is booming for anyone, I wonder how Honda and Toyota are faring?

switchblade327
11-06-2008, 11:22 AM
A little more on game publishers and credit:

http://www.gamasutra.com/php-bin/news_index.php?story=20448

"... nobody’s running out of money," Wedbush Morgan analyst Michael Pachter tells Gamasutra, noting that none of the game companies have borrowed any credit that's likely to be impacted by the lending crisis.

"Pretty much everything is going to get made as-is and sold," he says..."

Now this article is from the 30th of September and a lot of his other statements have already been proven wrong about the games barely feeling the pinch. The important point is that big publishers fund games with cash, not credit. The economic crisis absolutely effects how carefully they're going to spend that money now(which is why we see excess being trimmed) but a credit crisis doesn't bring production to a grinding halt if the money isn't borrowed.

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