EA to lay off some 540 souls

Business is not a game, it appears.

After posting disappointing financial results, games publisher Electronic Arts (EA) says it will be slashing six per cent of its global workforce.

Around 540 people will be handed their pink slips in a move the firm hopes will save about $US50 million. EA certainly feels it needs the spare change after recently disclosing a net loss of $US310 million last quarter, compared to a $US195 million loss last year.

The game company blamed Harry Potter for its bad financial spell, or rather, delays to the Harry Potter game, as well as higher development and marketing costs.

Luckily for EA, games like Spore, Madden NFL, Mercenaries 2 and Warhammer Online: Age of Reckoning have managed to offset losses a bit, pulling in $US894 million in revenues, well up from the $US640m the firm made last year, but the increased revenues just aren’t enough.

John Riccitiello, EA's CEO noted, "Considering the slowdown at retail we've seen in October, we are cautious in the short term".

The job cuts will span all functions and locations, and the firm is not ruling out compulsory redundancies either. "Longer term, we are very bullish on the game sector overall and on EA in particular," said Riccitiello, trying to remain optimistic.

EA’s shareholders, however, were not sharing the Chief Execs confidence. After the announcement, EA shares plunged some 18 per cent to $2US2.79 a share.

EA aren’t the only gaming firm to feel the squeeze. THQ studio Juice Games will also reportedly be letting 30 people go after having to axe an unannounced game title. The company will now have to game on with just 60 employees. The layoffs at Juice Games seem to be part of a wider cut back by THQ which is currently downsizing and closing internal studios.