Electronic Arts Stumbles on Layoffs
The video game publisher declined to specify the number of staff reductions or at which studios the layoffs had taken place. This is the third year in a row that Electronic Arts has had seasonal layoffs.
"As you know, seasonal roll-offs that follow game launches are common and vital to maintaining a healthy business," said Electronic Arts spokesperson Jeff Brown. "Because so many of our games ship in the holiday quarter, the team size adjustments tend to follow in the same timeframe. However, EA is growing and several of our studios are looking to hire talented people."
Shares were down 0.76% in early afternoon trading Thursday to $15.67.Earlier this week, social gaming company Zynga, maker of FarmVille, eclipsed Electronic Arts in valuation, according to SharesPost, an exchange for shares of privately held companies. Zynga is worth about $5.5 billion while Electronic Arts is valued at around $5.2 billion. Traditional video game companies like Electronic Arts have had difficulty transitioning from a retail-focused model to digital distribution. EA also faces new competition from social gaming companies which have lower development costs and higher profit margins. EA is expected to announce second quarter earnings on Nov. 2. --Written by Olivia Oran in New York.
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