Multiple internal sources have confirmed to StartUpGrind that Electronic Arts will be laying off 500-1,000 employees as early as this week. Supposedly, the layoffs were originally set for last Monday (4/9) but for some unknown reason, EA postponed it but they’re supposedly on track to do the layoffs now.
The site’s “sources” have claimed that EA is cutting costs due to the bad sales performance of MMO Star Wars: The Old Republic and Battlefield 3. According to their source, Battlefield 3 sales are estimated to be at 13 million units, but that the company “chased” the launch dumping an estimated $30m into “incremental” marketing after the game launched. They’re also saying that the Star Wars MMO’s sales are estimated at 3 million units but the subscriber-base, which are needed for an MMO, are already declining.
Aside from this, one other factor for EA’s financial downturn is the acquisition of expensive studios..chief among which is the buyout of PopCap (Plants vs. Zombies).
The same report claims that EA CEO John Riccitiello is now under duress internally to cut costs and turn things around.
In rather surprising news, EA has quickly answered the allegations and not with the usual “we don’t comment on rumors or speculations” PR talk that we’re used to seeing.
The publisher has flat-out denied the allegations and their statement can be read below (via MCV).
There are no lay-offs as such, we always have projects growing and morphing. At any given time there are new people coming in and others leaving. EA is growing and hiring and building teams to support the growing demand for digital games and services.
Not to question the rumor itself, but how can a game sell 13 million units and still under-perform? In any case, file this under the rumor cabinet for now and we’ll update the situation as more news develops.