Only days after being chosen by Consumerist voters as Worst Company In America for the second year in a row, Electronic Arts is not gaining many fans in Canada. Earlier today, it was reported that a large number of employees were laid off from one of EA’s studios in Montreal.
Since we’re not exactly on EA’s press release list, we’ve got the following statement given to Joystiq about the pink slips given to a rumored 60-70 full-time employees, and around 100 contract workers, at EA Mobile Montreal:
“EA is sharpening its focus to provide games for new platforms and mobile. In some cases, this involves reducing team sizes as we evolve into a more efficient organization. These are difficult decisions to let go of good people who have made important contributions to EA, and whenever possible we retrain or relocate employees to new roles. Streamlining our operations will help ensure EA is bringing the best next-generation games to players around the world.”
“If you walk through the office all you see is a bunch of already cleared out desks,” one employee told Joystiq, “and people cleaning out their desks.” According to some, the workers being laid off worked mostly in quality assurance.
There were signs of gloomy things to come in the company’s most recent quarterly reports, which blamed worse-than-expected sales of Medal of Honor as a major contributor to EA’s financial ills.
“Medal of Honor was an obvious miss,” wrote Chief Operating Officer and chief non-apology-writer Peter Moore. “The game was solid but the focus on combat authenticity did not resonate with consumers. Critics were polarized and gave the game scores which were, frankly, lower than it deserved. This one is behind us now. We are taking Medal of Honor out of the rotation, and have a plan to bring year-over-year continuity to our shooter offerings.”
As a result of this loss and some other shortcomings, EA had already begun thinning the herd in its offices around the world.
“We also reduced spending on headcount, variable compensation, contractors, marketing, advertising, and other general and administrative expenses,” wrote CFO Blake Jorgensen in the report. “We are being more critical with regards to expenses, concentrating our efforts on the highest value opportunities. In addition, we are focused on greater efficiencies in marketing, and leveraging the power of our brands to reduce the need for incremental spend. We continue to re-evaluate expenses, and cut-back where it makes sense.”
The one bright spot for EA was microtransactions — small dollar amount, in-game purchases for add-on content — which contributed $185 million to the company’s coffers, a 50% increase.
“I would like to point out that all of these digital revenue types have no physical goods costs, and there is no associated price protection. Eliminating these expenses provides greater savings resulting in higher margins,” wrote Jorgenson. “This digital momentum continues to build and we see this as the future.”
Thanks to Melissa for the tip!