Buffeted by ballooning losses and an economy that could eventually pummel game sales, Electronic Arts (EA) will be laying off about 1,000 workers worldwideor 10 percent of its staff, per an 8-K filing. EA is hoping to save about $120 million from the cuts, which will include the closing of at least nine studios. The company estimates $55-$65 million in restructuring charges over the next few quarters.
During its Q3 earnings call, EA said it would cut 6 percent; the increase could be a hint that holiday sales aren't going as smoothly as planned. The gaming sector has weathered the financial crunch fairly wellU.S. sales of games, consoles and accessories topped $2.9 billion in Novemberand while EA's own Q3 sales were up almost 40 percent year-over-year, the company did cut its EPS outlook slightly. CEO John Riccitello said the company was "cautious" about short term revenue forecasts, given the "slow down at retail" EA had seen in October.
By Tameka Kee