"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.