Electronic Arts to jobs cut

[dhilipkumar]

NEW YORK: US videogames giant Electronic Arts reported a hefty quarterly loss and said it was cutting six per cent of its workforce or 540 employees.

EA, publisher of such popular titles as Madden NFL 09, Spore and Warhammer Online, reported a net loss of 310 million dollars during the second quarter of its fiscal year compared with a loss of 195 million dollars a year ago.It said revenue rose to 894 million dollars from 640 million dollars a year ago on strong sales of Madden NFL, Spore, Mercenaries 2: World in Flames, NCAA Football 09, Tiger Woods PGA TOUR 09 and Warhammer Online: Age of Reckoning.

The Redwood City, California-based company said revenue at EA Mobile, which publishes games for phones, rose 24 per cent to 47 million dollars during the quarter. EA said the six per cent reduction in its 9,000-strong workforce would result in annual pre-tax cost savings of approximately 50 million dollars.

"Considering the slowdown at retail we've seen in October, we are cautious in the short term," EA chief executive John Riccitiello said in a statement.

"Longer term, we are very bullish on the game sector overall and on EA in particular.

"The industry is growing double-digits on the strength of three new game consoles and increases in the number of homes with broadband Internet connections. EA is well-positioned to benefit from these technology drivers." EA said it expected revenue for the year of between 4.9 billion dollars and 5.15 billion dollars, up 33 per cent to 41 per cent from the previous year.

EA said Madden NFL 09 was its top-selling title during the quarter, selling 4.5 million copies while SPORE sold two million copies in just three weeks. It said 1.2 million copies of Warhammer Online: Age of Reckoning were sold in the quarter and 800,000 people were currently playing online.

EA's share price was down 17.81 per cent at 22.79 dollars in after-hours trading in New York following the results announcement.