Electronic Arts closes Chicago office

By Rachel Konrad

updated 8:26 p.m. ET Nov. 6, 2007

SAN FRANCISCO - Electronic Arts Inc. announced Tuesday it would close its 150-employee office in downtown Chicago as part of a company-wide cost-cutting initiative.

Redwood City, California-based EA, the world's largest independent video game publisher, said last week it would trim its global work force about 4 percent, laying off about 350 employees. The company plans to consolidate two development studios in England.

EA Games President Frank Gibeau wrote in a memo to employees Tuesday that executives had wanted to announce the Chicago closure last week but postponed it when a staff member there died.

"We're willing to take risks, make long-term investments, and to support teams and individuals between launches. But each team is responsible for staying on a reasonable path to profitability," wrote Gibeau, who presides over one of the company's four main divisions. "Unfortunately, EA Chicago hasn't been able to meet that standard."

EA spokesman Jeff Brown, who was in Chicago on Tuesday, said EA would offer relocation opportunities and severance packages to many employees. He said the company was not planning closures other than in Chicago and England.

EA's Chicago workers developed Fight Night and Def Jam games. Investors have criticized EA for not investing enough in games for the Nintendo Wii, which debuted late last year and has become a runaway hit.

In the last quarter, EA lost $195 million, or 62 cents per share, compared with a profit of $22 million, or 7 cents per share, in the same period a year ago. Revenue in the fiscal second quarter plunged 18 percent to $640 million.

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