Electronic Arts is set to axe between 500 and 600 jobs after announcing a $310 million loss in the financial quarter ending September 30th.
Shares in the company have dropped nearly 20% as a result of the announcement.
Recent reports have suggested that the gaming industry is stronger than ever, despite the current economic turmoil, with some analysts going so far as to suggest that the games industry is "recession proof."
Speaking to Kotaku, EA spokesperson Mariam Sughayer said that as well as eliminating around 6% of their workforce, EA would also reduce hiring and close some open positions that they had planned for this fiscal year.
According to the Associated Press, EA believes higher development and marketing costs are to blame, as well as delays to the latest Harry Potter game. They also said that the job cuts will span across "all functions and locations."
Chief Executive of EA games, John Riccitiello, remained confident for the future: "Considering the slowdown at retail we've seen in October, we are cautious in the short term. Longer term, we are very bullish on the game sector overall and on EA in particular."
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