EA to slash workforce after reporting loss
The video game publisher cuts its forecast for the fiscal year and says it will slash its workforce 6 percent to reduce costs.
Video game publisher Electronic Arts on Thursday cut its forecast for the fiscal year and said it will slash its workforce 6 percent, or about 580 jobs, to reduce costs.
The Redwood City, Calif.-based company posted a net second-quarter loss of $310 million, or 97 cents, compared with a loss of $195 million, or 62 cents per share, for the year-ago period. Sales were up 40 percent year-over-year to $894 million on strength of the company's Rock Band, Spore, and Madden game titles.
However, EA cut its forecast for fiscal 2009 earnings per share excluding special items to a range of $1 to $1.40, from a previous range of $1.30 to $1.70. The company attributed the reduction to theand the rising value of the dollar cutting into overseas sales values.
"Considering the slow down at retail we've seen in October, we are cautious in the short term," CEO 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 shares fell $3.95, or 14 percent, to $23.78 in after-hours trading.