updated 2/2/2006 2:52:02 PM ET 2006-02-02T19:52:02

Electronic Arts Inc. on Wednesday began laying off several hundred workers in a move the video game publisher says will help cut costs and shift resources amid changing business strategies and a revenue-slowing transition to new gaming machines.

The job cuts will affect about 5 percent of the Redwood City, Calif.-based company's 6,500 employees, EA spokeswoman Trudy Muller said. She declined to give a specific number and would not discuss details about severance packages or divisions most affected.

All affected employees were notified Wednesday. Some cuts were effective immediately and others will occur during the next few weeks.

Muller said layoffs were also conducted during past transitions to new game consoles. "We look at it as an opportunity to align our people, technology and investments against strategic growth targets," she said.

EA, the world's largest video game publisher, as well as its smaller rivals, have all been stung in recent months with slower sales — a cyclical and typical result during a transition to next-generation gaming consoles. In this case, analysts say, consumers are delaying video game purchases in anticipation of the upcoming release of Sony Corp.'s PlayStation 3, or until they could get Microsoft Corp.'s newly released Xbox 360, which is scarce.

Yet even if video game sales were performing well during the hardware transition, Muller said some layoffs would have been planned since the company is focusing on new business areas, including developing games for mobile phones and expanding its reach into Asia.

"Every division will be changing to reflect our new priorities," she said.

Some laid off workers will be offered positions to work on different game projects while the company recruits new hires for other jobs, she said.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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