"10 percent of the workforce

EA plans to close nine facilities and cut 1,000 jobs across all divisions.

The company is blaming economic uncertainty for the unpopular move, and claims it is not generating as much revenue as expected. EA spokesman Jeff Brown says the company needs to focus on "making bigger bets on fewer games and cut costs accordingly." Apparently EA plans to play it safe, investing in popular franchises and proven concepts, rather than truly new, innovative, but also risky title.

EA expects it will save $120 million a year as a result of the restructuring, although the scheme itself will end up costing the company $65 million to implement. The company currently operates a number of facilities in the U.S. and Canada, and it's still unclear which are to be closed under the plan."
 

"EA spokesman Jeff Brown said the company will close nine facilities in addition to cutting 1,000 positions, or 10% of its workforce. The job cuts will take place across all divisions, said Brown.

"There's a high degree of economic uncertainty, and we're also not generating the revenue as forecast," said Brown, noting that the cuts will take place over the next three months. "We need to focus on making bigger bets on fewer games and cut costs accordingly."
 

""The decision to reduce our workforce was a very difficult one, especially during the holiday season," Kirk Walters, chief financial officer and acting chief executive, said in a press release. "There is never a good time to reduce staff, but this step is necessary, particularly during this economic environment."

This 10% staff reduction is inclusive of the 6% cut that the company had announced on Oct. 30 in its quarterly earnings report."

Nine facilities, is Mythic effected by this anyone know, is it was some guys are becoming more pally with the bioware folks lately?

Right at christmas.... OUCH!

Originally posted by tikovoo
...

Apparently EA plans to play it safe, investing in popular franchises and proven concepts, rather than truly new, innovative, but also risky title.

... 

Urgh I do not see anything good coming out of that line right there.

If EA cuts jobs in Warhammer, that can only be a good thing.

The remaining employees will probably be so happy to be working in 2009, that they will be better, harder working employees. MJ might even have to pull out a whip or two to keep them pressing as they have a ways to go yet on CTDs, fixes, putting those new classes and cities in, class balancing issues, etc.

When you trim away fat, muscle remains. Maybe the remaining people will be more productive and get the game fixed.

 I wouldn't be suprised if this effected Bioware more than Mythic. Staff cuts in a huge company like EA usually start with projects not released first. Then they move onto Customer Service for games running. This could also have no effect on thier online gaming world, and could directly effect the console market with games like Tiger and Madden coming to an end. For now it's really up in the air until it happens.

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I wouldn't be suprised if this effected Bioware more than Mythic. Staff cuts in a huge company like EA usually start with projects not released first. Then they move onto Customer Service for games running. This could also have no effect on thier online gaming world, and could directly effect the console market with games like Tiger and Madden coming to an end. For now it's really up in the air until it happens.

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Good post.

One thing to think about is they don't want to get into a kind of battle regarding underfunding with a Star Wars title. That could bring LucasArts into it and they don't want to tangle with those guys. I bet they fully fund Bioware so they don't get a reputation of messing up someone's IP down the line. I don't see them shorting Bioware, because then they'd cry to Lucas. You don't wanna mess with Lucas. The force is strong in that one.

As they say, underperforming and riskier titles get the cuts.. Star Wars is a proven IP. Not risky at all.

What helps Warhammer is analysts say they have numbers at around 250k-300k and not projected to rise past that. While thats nowhere near what Paul Barnett was hyping, its steady enough and MAY make EA look at something else other than Warhammer.

yeah, EA is going to cut back on an MMO with hundreds of thousands of players paying them $15 per month and the potential for more if they play their cards right. 

Lets all hope that good for nothing lame turkey MJ loses his job, that guy is nothing but a Brad McQuaid voicing the eternal BS "We're gonna be the next WOW" - laugh

Sooner that guys is out of this industry the better, oh and he can take his stupid personal project with him too = Crafting

not good i would hate to be one of the people laid off but i guess thats life. i love how there is only one person to have the failhammer that i have seen. pretty funny

Originally posted by mackdawg19

 I wouldn't be suprised if this effected Bioware more than Mythic. Staff cuts in a huge company like EA usually start with projects not released first. Then they move onto Customer Service for games running. This could also have no effect on thier online gaming world, and could directly effect the console market with games like Tiger and Madden coming to an end. For now it's really up in the air until it happens.

On the other hand have Bioware sold a lot of games and Dragon age: Origins ase suppose to release in a month, if it sells well they will probably give priority Bioware in the company, no one kills the goose that lay golden eggs.

I don't know WARs current subs but if EA is unhappy with it they might cut the staff badly or even in worse case scenario kill the game.

It is always hard to tell what these things affects but one thing is clear, it is not a good thing.

Hopefully EA will cancel some of their dumber games which they give out with some small updates every year instead of hurting the MMOs but I would be suprised if WAR won't be affected, for one thing the patches will probably be fewer and the customer service will probably go down. On the other hand they might fire GOAs butt and move the service of the EU servers to something EA owns, and that would actually be a good thing.

Bioware are a company that have made a lot of bestseller games so my hope is that they just cut the marketing of the games, they don't really need that anyways. I don't know why they were so stupid that they let EA buy them, they were doing fine on their own.

Originally posted by SaltyBogey

Lets all hope that good for nothing lame turkey MJ loses his job, that guy is nothing but a Brad McQuaid voicing the eternal BS "We're gonna be the next WOW" - laugh

Sooner that guys is out of this industry the better, oh and he can take his stupid personal project with him too = Crafting

Mark is an outstanding man. He has given a great deal to this genre, he is incomparable to Brad McQuaid, and you have no place bad mouthing him.

To the people that are worried: I think you may be overestimating EA's authority in the Mythic studio. I doubt they would try to fire any Mythic employees, because that would just cause a huge battle between the EA executives and Mr. Mark Jacobs, someone who cares a great deal about the people that work with him.

 No doubt that MJ cares about people his own people, but still he's being paid by E.A.

Looking at the way EA  force ( i think )  Mythic to come out with an un-finish game, bringing more and more bugs with each patch, i say MJ have totallly no say if EA really want to cut some staff from them because the sub of War is not what they have hope for. 

Its EA to be blame though, but i dont think they care. And with their record, if War dosen't improve, they will be put on life support soon....

Originally posted by Tyvolus1

yeah, EA is going to cut back on an MMO with hundreds of thousands of players paying them $15 per month and the potential for more if they play their cards right. 

Uh, that is EA we are talking about, not someone sane. They have killed MMOs before even if they still was making money on them. They are kinda the opposite to SOE there.

And looking on your your remark you don't know how business works. Take my (well paid) crap job.

We make bread. We use to have 2 large bakeries, one for mostly light bread and another little older but with better bakers making the dark bread. Stupid boss looks at how long time the bread takes to make (time = money). The modern bakery makes bread faster. Aha, he thinks so he build out that one and closes the other one. Only problem is that good dark bread takes time and you need experience to make it. So the bread look like crap and suddenly our sales go down a lot on it, which is bad since we make most profit on dark bread. What does he do then? Well not him since he got fired for incompetence but the next guy who seems to be a clone. He fires a lot of bakers so they have to work even faster, the products look even crappier and sales go down again...

And I seen the same story at other companies making other stuff too. My favorite were when they fired me (highly skill technician) and replaced me with a 55 year auto mechanic (no experience of machines, he was working as mech in a small town in turkey) to run the only machine that were still making a big profit, after they hired me i had almost doubled the production of the same machine, not because I am great or anything but because the old guy doing it was another guy with no experience of machines whatsoever and the machine was complicated to work. They saved 150 bucks a month on that (not counting that I did all the maintanence on it also), and what a guy I know still working there said they lost more than that every day on that (Well they did ask me if they could cut my salary first, yeah right). I have loads of more storys like these ones.

The problem is that many companies and bosses only see costs, not gains and EA have that problem. In other words: they are morons. They could totally kill Mythic because their salary costs to much or something. EA want safe cards like another stupid the Sims expansion, they costs almost zero to make and sell like stupid. I am off course not saying that they will but they can.

Originally posted by arctarus

 No doubt that MJ cares about people his own people, but still he's being paid by E.A.

Looking at the way EA  force ( i think )  Mythic to come out with an un-finish game, bringing more and more bugs with each patch, i say MJ have totallly no say if EA really want to cut some staff from them because the sub of War is not what they have hope for. 

Its EA to be blame though, but i dont think they care. And with their record, if War dosen't improve, they will be put on life support soon....

  

regardless of what they do to WAR or Mythic directly. I am gonna guess that alot of the Mythic higher ups, especially MJ are sweating a bit right now. No matter how you spin the numbers. Fanboi hater what have you, it comes down to this. EA wanted and was expecting something in WoW's scale of success. They wanted WoW numbers, or at least enough to make them a strong number 2. They wanted the money hats and bragging rights. Whereas Mythics team led by MJ seemed for awile to realize that they were making a more niche product, with an enthusiastic but smaller expected subscriber base. EA and Mythic never seemed to square this before release. Which can only reflect poorly on the Mythic management team in EA's eyes. WAR is a big expensive project that didn't bring in the numbers that the EA guys were dreaming about. Good product, bad product, paying for itself, none matter beyond that simple fact.

EA may have even overlooked this and gone with the solid niche product and subscriber base. But mear weeks after release Blizzard comes along and has a population increase during the time of WAR, that exceeds WARS's release numbers, AND launches an expansion pack that outsells anything ever seen within 24 hours. The EA execs will look at this and feel that the expanding market for this sort of product was rather obviously there... and Mythic failed to hit it.

EA doesn't have that kind of control over Mythic.  This is why Mythic retained their own name, because they are in charge of how they spend their money.  Mythic probably won't cut a bunch of jobs like EA.  However Mythic may be given less funding to put into WAR.  This may result in Mythic cutting a few jobs, but I doubt EA is dictating how many jobs they need to cut.

MJ said they would have 1M subscribers by Dec 31st.  He said they would have 2-3M in the coming years.

They currently have 300-400k subscribers and they are not selling any new boxes, which means the game is not growing and has likely reached it's peak the first month ( 800k).  I'm sure the accountants are looking at the subscription numbers of Warhammer and the box sales and realizing it's definitely not a huge moneymaker.

At the least you are going to see a big loss in customer service (no reason to be equpped for the 1M players when you only have 300k).

I'm really upset about Bioware.  Bioware is the only company I feel was capable of making a MMORPG that could really compete with WOW.  Now that they have been bought by EA, you can bet the quality will go down because of it.

Mythic is an operating division of EA.  They changed the name to differentiate brands prior to the launch (in part because EA's name in MMO land is pretty much mud), but EA is in charge ultimately of what happens at Mythic.  It's like Maxis in that regard.

I take the comments to mean an increased focus on their core franchises -- which are the sports games and The Sims games -- which sell pretty much no matter what.  I'd think that TOR will also be one of the "bets" they make, due to the power of the IP.  WAR, if it has the 300-500k subs that people suspect, will be fine, because it would be better financially for EA to keep the game around for a while at least to amortize more of the development cost, than to kill it.

Nope.

In a bad economy, its services that gets cut first and then you trim the fat from the remaining budget. That 10% cut includes contracts that aren't being renewed (generally) and a some customer service.

It looks like EA is positioning themselves to grow. Think of it as pruning a tree. Old branches need to be cut in order for upward growth to continue.

Originally posted by Raiz1

Nope.

In a bad economy, its services that gets cut first and then you trim the fat from the remaining budget. That 10% cut includes contracts that aren't being renewed (generally) and a some customer service.

It looks like EA is positioning themselves to grow. Think of it as pruning a tree. Old branches need to be cut in order for upward growth to continue.

In a bad economy, its under performing projects that get cut first.  Question is, does this include WAR?

First, I would like to congratulate 99% of this thread posters for posting INTELLIGENT and well thought out views that show many different trees. You guys really brought your lunches and make some excellent points either way. I didn't see one "you jackass" post either. /fuzzy. Nice job.

War will be fine as a game I believe. They definitely, as everyone knows by now, did not meet what they told EA heads in pre-production meetings about what numbers they'd pull, that much is as obvious as Will Smith's ears.

But Warhammer has stabilized to around 300k subs and is not underwater. It however, is not bringing in any new subs to great numbers based on their marketing. I don't think word of mouth is killing Warhammer. It's just not moving without a lot of publicity anymore. The dark-shaded Paul Barnett hype machine was what sold all those first 800k. (maybe they should dust that guy off and bring him out of mothballs?) But quality is what usually keeps any customer to a product. Willingness to listen can only make up for so much when it comes to content and quality. Chrysler and GM listens to customers all the time in focus groups, but that doesnt't stop people from buying Japanese. The product just isn't where it should be compared to others, so most people don't buy it anymore.

Based on their most recent PR move ("Find a new recruit, get 30 days free playtime) it isn't a good sign overall. While most MMOs do this from time/time, this kind of move is usually done well after 6 months to a year, after a games base has leveled off and new subs are stagnant. Warhammer doing this three months after it's official release date does not bode well, no matter which way you look at it from a customer point. From a business sense, it's a needed move and I agree they have to kick start the game somehow. Just fixing the things in the game helps keeps the base you already have, but doesn't really get new people in.

But this is the kind of thing that you can be sure EA heads notice. Even though the game isn't dead by any stretch, EA may wonder if its worth just holding on to a game that frankly, is just holding on. They won't cut the game totally, but you can bet funding will not be as vigourous. That means MJ will have to make all the tough decisions. EA probably would want them reduce staff and keep the game running as it is.. they probably wouldn't want to spend any more money to upgrade the game since its getting by. Thats where MJ will have problems maybe.. keeping current funds coming in.

Originally posted by Kyleran

Originally posted by Raiz1

Nope.

In a bad economy, its services that gets cut first and then you trim the fat from the remaining budget. That 10% cut includes contracts that aren't being renewed (generally) and a some customer service.

It looks like EA is positioning themselves to grow. Think of it as pruning a tree. Old branches need to be cut in order for upward growth to continue.

In a bad economy, its under performing projects that get cut first.  Question is, does this include WAR?

 

Nah, you are right with under-performance, but WAR doesn't fit that category imo.

You ALWAYS have job cuts after a merger unless you get bought by FedEx (cause those guys don't lay anyone off). Not renewing contracts plays a lot into future projects, maybe console games. Madden '10 might not be that great. This is the perfect time for it and you see less "stuff" in the budget. I'll give you a few examples:

No merit raises; no bonuses; reduction in 401k contributions; different benefits program and insurance provider; no more coffee in the emplyoee break-room; no more catered lunches for the office; cheaper office supplies; reduced hours of operation.

The above are all things you see just before, during, and after the axe falls. It has less to do with WAR and more to do with EA as an entity. I think call-in customer service and response times will take a direct hit. Only time will tell how deep the rabbit hole goes, but 1000 jobs can easily be cut without 1 title noticing a big difference.

Originally posted by Raiz1

Originally posted by Kyleran

Originally posted by Raiz1

Nope.

In a bad economy, its services that gets cut first and then you trim the fat from the remaining budget. That 10% cut includes contracts that aren't being renewed (generally) and a some customer service.

It looks like EA is positioning themselves to grow. Think of it as pruning a tree. Old branches need to be cut in order for upward growth to continue.

In a bad economy, its under performing projects that get cut first.  Question is, does this include WAR?

 

 

Nah, you are right with under-performance, but WAR doesn't fit that category imo.

You ALWAYS have job cuts after a merger unless you get bought by FedEx (cause those guys don't lay anyone off). Not renewing contracts plays a lot into future projects, maybe console games. Madden '10 might not be that great. This is the perfect time for it and you see less "stuff" in the budget. I'll give you a few examples:

No merit raises; no bonuses; reduction in 401k contributions; different benefits program and insurance provider; no more coffee in the emplyoee break-room; no more catered lunches for the office; cheaper office supplies; reduced hours of operation.

The above are all things you see just before, during, and after the axe falls. It has less to do with WAR and more to do with EA as an entity. I think call-in customer service and response times will take a direct hit. Only time will tell how deep the rabbit hole goes, but 1000 jobs can easily be cut without 1 title noticing a big difference.

Actually, the opposite is true.  It is much better to fire 10% of your workers and have them be unhappy, then it is to reduce pay and benefits of 100% of your current workers and have them be unhappy.

Or as it is written in my textbook.   " Never cut benefits when you can cut jobs"

so it look like an additional 4% got the axe company wide,

Additional 4% to get the ax company wide

More bad news from the additional restructuring plans at EA comes in the form of an additional four percent of employees to be on the chopping block over the next three-month period, as the company continues to refocus its efforts and narrow its product offerings.

The additional headcount reductions will be spread out over the company globally and will not be focused on any specific studio or business unit. The cuts will take place over the next three months and are targeted to be completed before the company begins its next fiscal year on April 1st 2009.

According to our source, Black Box studio, which is based in Vancouver and responsible for the Need for Speed franchise as well as the Skate franchise, will move to the EA studio in Burnaby, British Columbia as part of the latest restructuring moves. Plans to add a third studio in Vancouver have been abandoned for the time being, but that’s not to say that they might not be revisited at some point in the future.

While some had suggested that EA-owned Pandemic and EA Los Angeles would see significant reductions as part of the latest moves, our sources are now telling us that while these studios would see reductions, they would not be any more or any less than other EA studios or facilities.

EA is also looking at the portfolio of gaming offers and while they continue to be committed to taking risks and producing high-quality games, some underperforming titles can be expected to be dropped during this restructuring process. Currently, no specific titles have been mentioned, but it is expected that each and every title will have to justify its profitability in order to continue development.

In addition to the restructuring, EA has also announced that it has joined the Steam digital distribution platform owned by Valve. EA is launching on Steam with Mass Effect, EA Sports FIFA Manager 2009, Need for Speed Undercover, and Spore Creepy & Cute Parts Pack. In addition, the company will also be adding Spore, Warhammer Online: Age of Reckoning, Command & Conquer: Read Alert 3, Mirror’s Edge, and Dead Space, with the majority of these becoming available on Steam in January 2009.

The announcement that EA will become committed to the Steam digital distribution platform is a radical shift for the company. EA has been a holdout on offering games using Steam for the PC; it has instead been attempting to build up its own digital distribution service. As least for the time being, EA will continue to have PC offerings that will be available using its service as well as Steam’s."
 

Another headline reads: EA not connecting with gamers

Star Wars MMO might be best hope in the pipeline

What is the real problem with EA these days? Many analysts seems to think that while the company has some solid titles that have had moderate success by today’s standards, the majority of the recent releases have lacked the ability to connect with hard core console gamers.

EA has continued to have success with titles in the EA Sports brand, as well as the Sims releases, but other recent titles such as the latest Need for Speed and Mirror’s Edge have been flat, even through the titles received good reviews from the media.

As for the future, we have been reporting over the last several weeks that the company will restructure and refocus in an attempt to figure out what gamers want and deliver compelling content to get sales moving again.

While the company has some titles already in the pipeline for 2009, the best hope for the company to recapture market share might come in the form of Star Wars: The Old Republic MMO that is being developed by Bioware.

It would also appear that EA has not invested enough money in the development of bringing new hit franchise to the console market space. Instead, the company relied on trying to rehash the same old franchises in new ways to drive sales and this strategy had led to a decline in some of the best franchises in the EA stable.

While it will be hard for EA to establish a new franchise on the current generation of console system, it is obvious that gamers are looking for something that is much better than the titles that EA has been shoveling out as of late. The innovative titles that have been released by the company have gone unnoticed and it is going to take a lot of hard work and some luck for the company to get back in the game. It might, in fact, not happen in this round of console systems at all, but instead have to wait till the next generation of console system before the company can get some of its mojo back. "

Doesn't look good to me, I have a feeling WAR is not profitable enough for them.

Apparently EA plans to play it safe, investing in popular franchises and proven concepts, rather than truly new, innovative, but also risky title.

there's no way they will ger rid of Madden, even though they really need to design a new engine for that game and NCAA 09 and get rid of the glitches....if they cut any of those console sports games it will probably be like Nascar and Hockey.

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Star Wars MMO might be best hope in the pipeline

What is the real problem with EA these days? Many analysts seems to think that while the company has some solid titles that have had moderate success by today’s standards, the majority of the recent releases have lacked the ability to connect with hard core console gamers.

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While the company has some titles already in the pipeline for 2009, the best hope for the company to recapture market share might come in the form of Star Wars: The Old Republic MMO that is being developed by Bioware.

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My thinkings exactly as earlier. They won't be underfunding Bioware. They don't want to have any problems with an established IP such as LucasArts and Star Wars. Bioware is as safe as a Wall Street bank trying to secure government bailout funds.

Originally posted by Azrile 

Actually, the opposite is true.  It is much better to fire 10% of your workers and have them be unhappy, then it is to reduce pay and benefits of 100% of your current workers and have them be unhappy.

Or as it is written in my textbook.   " Never cut benefits when you can cut jobs"

As long as you do it in one axe chop.  If you spread out layoffs, or layer them, such that people are hanging on for 3, 4, 6 months not knowing whether the axe chopping is done with .. that creates huge morale problems which eat into productivity substantially. 

I've seen companies mix and match too -- get rid of merit increases and the like, move everyone to a 90% schedule (ie, give everyone a 10% paycut) and lay off some people, but less than would have otherwise been the case.  The people who are *not* laid off in that scenario -- if this is sold to the employees as a package deal -- will be more accepting of it because it helps them avoid being laid off.