John Paczkowski

Recent Posts by John Paczkowski

EA Reboot Cost 900 Jobs

dead-spaceSo, those “hard but essential changes” and “difficult organizational decisions” Electronic Arts announced back in late April, but refused to explain in detail? It did so last night during its fourth-quarter earnings call, and they’re not pretty.

Since announcing that organizational update on April 25, EA has sacked 10 percent of its workforce, CFO Blake Jorgensen confirmed. The company had about 9,000 employees at 2012’s end, so some 900 of them lost their jobs as a result of the cuts.

The headcount reduction, which EA hopes will push it further toward its goal of achieving a 20 percent operating margin, increased the company’s operating expenses for the quarter by about $15 million. According to EA, that was largely due to severance, and the company says that following this spike, its OpEx will begin going down.

“We’ve taken a hard look at the organization,” said EA Chairman Larry Probst. “We have really focused the product portfolio. We’ve made some adjustments in terms of headcount and operating expenses. My job is to make sure that we’re growing the top line and the bottom line and rationalizing headcount and cost in conjunction with revenue. I think we’ve done a really good job of that in nailing down our fiscal ’14 plan.”

If that’s the case, EA should be well positioned for growth in the year ahead, particularly now that it has secured a long-term licensing deal with Disney to make games based on the “Star Wars” franchise.

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