Nov 25, 2020
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Electronic Arts to close Vancouver studio in global restructuring

Electronic Arts, the giant video game company, will close Black Box Studio in downtown Vancouver, as well as eight other studios, and will lay off another four per cent of its employees worldwide, the company announced Friday.

The Black Box staff will move to EA’s studio in Burnaby.

On Oct. 30, the company announced it would lay off six per cent of staff. That figure is now 10 per cent, or about 1,000 people.

Disappointing games sales during the fall period resulted in the company making cuts. With Friday’s move, EA expects to save $120 million in annually, and $55-65 million over the next few quarters.

Last week, EA abandoned plans to open a new Vancouver studio in Yaletown, saying it would lease the office space.

The company did not disclose how many of EA’s 1,800 Vancouver and Burnaby employees have lost their jobs. It also did not disclose which other studios are being consolidated.

In addition to Burnaby, EA operates North American studios in Montreal, Edmonton, San Francisco, Los Angeles, Austin, Texas, and Orlando Fla., as well as in Australia, Germany, China, Sweden, Singapore and the United Kingdom.

The closing of the studios and the job cuts will all be made prior to March 31, 2009, the end of EA’s fiscal year.

EA Canada director of communications Colin Macrae stressed that Black Box Studio is not closing, but rather relocating to the Burnaby facility by mid-2009. He added that terminated employees will receive a severance package, but did not specify what it was because severance pay “is on a case-by-case basis.”

Macrae said the slumping world economy, slow holiday sales and pledge to reduce costs are all factors in Friday’s announcement.

“The imperative is to reduce our cost structure and become leaner, and the move to close our downtown facility and consolidating our Lower Mainland operation here at the Burnaby campus is one definitive way we can do that,” said Macrae.

Pre-Christmas sales for video games have been disappointing for many companies, and some big EA titles — Need For Speed: Undercover, Rock Band 2 and Mirror’s Edge — fell short of expectations. In the past year, EA shares have fallen 67 per cent.

On Friday’s NASDAQ, shares were up 3.8 per cent to close at $17.39.

In the past two years, EA has introduced new titles that had nothing to do with existing franchises. However, Friday’s press release from EA’s headquarters in Redwood City, Calif., stated that the company will “narrow its product portfolio to focus on hit games with higher margin opportunities.”

Macrae said he couldn’t say if this means the number of new titles will be slashed. “We will continue to invest in new IP and continue to take creative risks, but the ongoing imperative is to reduce our cost structure so we can operate more efficiently,” said Macrae.

The belief that the video game industry would somehow be immune to the economic slowdown has taken a hit in the last six months, and Vancouver companies have not been spared. In August, Radical Entertainment gave pink slips to 120 of its 280 employees in a corporate restructuring by parent company Activision Blizzard.

Source: Vancouver Sun

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Headline, Industry News

Electronic Arts to close Vancouver studio in global restructuring

Electronic Arts, the giant video game company, will close Black Box Studio in downtown Vancouver, as well as eight other studios, and will lay off another four per cent of its employees worldwide, the company announced Friday.

The Black Box staff will move to EA’s studio in Burnaby.

On Oct. 30, the company announced it would lay off six per cent of staff. That figure is now 10 per cent, or about 1,000 people.

Disappointing games sales during the fall period resulted in the company making cuts. With Friday’s move, EA expects to save $120 million in annually, and $55-65 million over the next few quarters.

Last week, EA abandoned plans to open a new Vancouver studio in Yaletown, saying it would lease the office space.

The company did not disclose how many of EA’s 1,800 Vancouver and Burnaby employees have lost their jobs. It also did not disclose which other studios are being consolidated.

In addition to Burnaby, EA operates North American studios in Montreal, Edmonton, San Francisco, Los Angeles, Austin, Texas, and Orlando Fla., as well as in Australia, Germany, China, Sweden, Singapore and the United Kingdom.

The closing of the studios and the job cuts will all be made prior to March 31, 2009, the end of EA’s fiscal year.

EA Canada director of communications Colin Macrae stressed that Black Box Studio is not closing, but rather relocating to the Burnaby facility by mid-2009. He added that terminated employees will receive a severance package, but did not specify what it was because severance pay “is on a case-by-case basis.”

Macrae said the slumping world economy, slow holiday sales and pledge to reduce costs are all factors in Friday’s announcement.

“The imperative is to reduce our cost structure and become leaner, and the move to close our downtown facility and consolidating our Lower Mainland operation here at the Burnaby campus is one definitive way we can do that,” said Macrae.

Pre-Christmas sales for video games have been disappointing for many companies, and some big EA titles — Need For Speed: Undercover, Rock Band 2 and Mirror’s Edge — fell short of expectations. In the past year, EA shares have fallen 67 per cent.

On Friday’s NASDAQ, shares were up 3.8 per cent to close at $17.39.

In the past two years, EA has introduced new titles that had nothing to do with existing franchises. However, Friday’s press release from EA’s headquarters in Redwood City, Calif., stated that the company will “narrow its product portfolio to focus on hit games with higher margin opportunities.”

Macrae said he couldn’t say if this means the number of new titles will be slashed. “We will continue to invest in new IP and continue to take creative risks, but the ongoing imperative is to reduce our cost structure so we can operate more efficiently,” said Macrae.

The belief that the video game industry would somehow be immune to the economic slowdown has taken a hit in the last six months, and Vancouver companies have not been spared. In August, Radical Entertainment gave pink slips to 120 of its 280 employees in a corporate restructuring by parent company Activision Blizzard.

Source: Vancouver Sun

Leave a Reply

Your email address will not be published. Required fields are marked *

Headline, Industry News

Electronic Arts to close Vancouver studio in global restructuring

Electronic Arts, the giant video game company, will close Black Box Studio in downtown Vancouver, as well as eight other studios, and will lay off another four per cent of its employees worldwide, the company announced Friday.

The Black Box staff will move to EA’s studio in Burnaby.

On Oct. 30, the company announced it would lay off six per cent of staff. That figure is now 10 per cent, or about 1,000 people.

Disappointing games sales during the fall period resulted in the company making cuts. With Friday’s move, EA expects to save $120 million in annually, and $55-65 million over the next few quarters.

Last week, EA abandoned plans to open a new Vancouver studio in Yaletown, saying it would lease the office space.

The company did not disclose how many of EA’s 1,800 Vancouver and Burnaby employees have lost their jobs. It also did not disclose which other studios are being consolidated.

In addition to Burnaby, EA operates North American studios in Montreal, Edmonton, San Francisco, Los Angeles, Austin, Texas, and Orlando Fla., as well as in Australia, Germany, China, Sweden, Singapore and the United Kingdom.

The closing of the studios and the job cuts will all be made prior to March 31, 2009, the end of EA’s fiscal year.

EA Canada director of communications Colin Macrae stressed that Black Box Studio is not closing, but rather relocating to the Burnaby facility by mid-2009. He added that terminated employees will receive a severance package, but did not specify what it was because severance pay “is on a case-by-case basis.”

Macrae said the slumping world economy, slow holiday sales and pledge to reduce costs are all factors in Friday’s announcement.

“The imperative is to reduce our cost structure and become leaner, and the move to close our downtown facility and consolidating our Lower Mainland operation here at the Burnaby campus is one definitive way we can do that,” said Macrae.

Pre-Christmas sales for video games have been disappointing for many companies, and some big EA titles — Need For Speed: Undercover, Rock Band 2 and Mirror’s Edge — fell short of expectations. In the past year, EA shares have fallen 67 per cent.

On Friday’s NASDAQ, shares were up 3.8 per cent to close at $17.39.

In the past two years, EA has introduced new titles that had nothing to do with existing franchises. However, Friday’s press release from EA’s headquarters in Redwood City, Calif., stated that the company will “narrow its product portfolio to focus on hit games with higher margin opportunities.”

Macrae said he couldn’t say if this means the number of new titles will be slashed. “We will continue to invest in new IP and continue to take creative risks, but the ongoing imperative is to reduce our cost structure so we can operate more efficiently,” said Macrae.

The belief that the video game industry would somehow be immune to the economic slowdown has taken a hit in the last six months, and Vancouver companies have not been spared. In August, Radical Entertainment gave pink slips to 120 of its 280 employees in a corporate restructuring by parent company Activision Blizzard.

Source: Vancouver Sun

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Your email address will not be published. Required fields are marked *

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