Video game maker Electronic Arts (EA) said Friday it plans to cut 1,000 jobs, or 10 percent of its workforce, after announcing in October it would cut just 6 percent.
The news follows a warning last week that it would miss its revenue and earnings targets for fiscal-year 2009. Most of the job cuts should be completed by the end of the fiscal year on March 31, 2009, EA said.
EA, in Redwood City, California, also plans to consolidate nine of its locations, closing some of them. One of the facilities that will close is Black Box Studio in Vancouver, British Columbia, the company said Friday. Its development teams and game franchises will move to an EA studio nearby in Burnaby, British Columbia.
EA is just one of many technology companies being hit by the U.S. recession. According to the nonpartisan National Bureau of Economic Research, the U.S. economy has been in a recession since December 2007.
EA, which publishes the popular Rock Band and John Madden NFL football games, said it missed 2009 financial expectations because of lower than expected sales across North America and Europe. To remedy its financial situation, EA has said it will take costs out of its business by reducing its product portfolio for fiscal 2010, cutting jobs and consolidating facilities.
Job cuts and restructuring should save the company about US$120 million annually, EA said Friday. However, the company will be hit with restructuring charges of about $55 million to $65 million over the next several quarters.