Still Have A Job? You're Doing Better Then These Guys

Microsoft: 5000 jobs gone
Sony: “headcount reduction” incoming
Sega: 30 positions removed
Trion: 20 axed
Eidos: 14 down
EA: Who knows? Even Madden not immune. Ship a game, lose your job.

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40 Responses to Still Have A Job? You're Doing Better Then These Guys

  1. JuJutsu says:

    As someone who became involuntarily unemployed once myself I always hate to see this sort of thing happen regardless of industry, location, et cetera.

  2. rbtroj says:

    Just waitin’ for the ax to drop here. Our parent reportedly has plenty of cash, but when branches and subsidized customers have “errors” in the tens of millions of dollars, how long can that cushion last? I’m worried because my job is such a “frosting” position it would be very likely one of the first to go. And I’m somewhat above the top of a very wide salary range for my position in my industry. So if I fall to cutbacks … there goes my AoC account, I guess. Don’t feel bad, I wouldn’t feel sorry for me either.

  3. Juan says:

    Having lots of cash doesn’t mean anything. Its the bottom line every quarter that really matters. Plenty of these companies (at least MSoft and EA that I remember) have tons of cash but they are still letting go of people in order to make their statements look healthier.

  4. […] layoff time!  Not a great time to be a game developer, and Scott’s count is only the stuff from the last […]

  5. Matt Mihaly says:

    I’m sorry for all the people who have lost their jobs. That’s unfortunate, though I fear it’s just the tip of the iceberg.

    It does point out one thing though: Joining a ‘big’ company as opposed to a small one does not mean your job is stable. (Yes, I’m a little biased towards small companies but the point remains.)

  6. Tesh says:

    Juan, I can’t help but be annoyed at publiclly traded companies for precisely that effect; making their balance sheets look better. The neverending quest for “higher returns” eventually causes the sort of bookkeeping shenanigans and HR cuts that killed Circuit City (and are undermining the rest of the economy, really).

  7. Matt Mihaly says:

    Naah, what fundamentally killed Circuit City was that it’s basically indistinguishable from Best Buy, except not as good.

  8. Mordiceius says:

    Best Buy is good? New flash to me.

  9. wowpanda says:

    I have to agree with Matt here, smaller companies are much better at obtain better employees. It is not unusual for larger companies to have many people who doesn’t do much.

    And you can’t blame companies for wanting to profit. If you have $1000 and invested in a company, would you rather donate it to the company so they don’t lay off people?

    The economy works because companies tries to create value, in the process they hire people. If you make them a charity, the whole thing will tank. US is in its current position because people in US tried to live beyond their means. Big houses, free health care and only work 40 hours or less per week? LOL.

  10. JohnMoore64 says:

    @wowpanda, I don’t know what fantasy world you live in, but I work more than 40 hours a week and have neither a big house nor free health care. I don’t know anyone in that position.

    Free health care? What part of the US are you in? I want to live there.

  11. Freakazoid says:

    Being unemployed for some time now is fun! So much free time to think and play games… Oh, yeah, the lack of money. I guess it doesn’t bother me as much.

    My brother works as a product tester for Nintendo. They just cut like 25 guys the other night (out of a force of like 150+ testers). He must’ve just missed the axe, as he’s only been working there for about 6 months.

  12. Ashendarei says:

    JuJutsu :As someone who became involuntarily unemployed once myself I always hate to see this sort of thing happen regardless of industry, location, et cetera.

    I echo this precisely, even to the point of involuntary unemployment :-/

  13. Iconic says:

    “Best Buy is good? New flash to me.”

    But apparently not news to all the people who shop at BB and not at CC.

  14. wowpanda says:

    JohnMoore64 :
    @wowpanda, I don’t know what fantasy world you live in, but I work more than 40 hours a week and have neither a big house nor free health care. I don’t know anyone in that position.
    Free health care? What part of the US are you in? I want to live there.

    That is what people in US are demanding, especially the Union guys. Have you heard that average union auto work in US cost $80 an hour, while the foreign ones in US are less than $40? It is only a matter of time before this all catches on.

  15. JohnMoore64 says:

    The $80 an hour cost is a bit of propaganda put out there by anti-union activist. I’m not saying unions are good, or that they are bad. But union auto workers make around $30 an hour. The $80 an hour figure includes ALL labor costs, including retirees.

    So maybe we should take a soylent green solution to our workers to help our labour costs? Once you’re too old and unproductive to work, we’ll just feed you to the productive workers?

    The economic problems were not caused by some unionized auto workers getting good health care. And the unfortunate workers being laid off right now are about to face the truth about just how unfree health care is. Anyone who’s been forced onto a COBRA knows the leason all to well.

    No one is demanding free health care on a 40 hour work week and subsidized 4 bedroom, 1 & 1/2 bath homes. It’s not the workers fault for this mess. It’s an insult to those suffering to say it is.

  16. Dave Rickey says:

    wowpanda knows that, he’s spouted the same line (and had it debunked thoroughly) in other places.

    Most of these are totally driven by the balance sheet and market analysts, and have nothing at all to do with any real financial hardships at the companies involved (the industry is making more money than ever, and publishers are keeping ever larger shares of it). They just need to reduce their payroll in an effort to stay in the portfolio mix of big investors who not only don’t look at their companies, they don’t even look at balance sheets, just work off a composite score of major analysts. Companies that reduce their payroll gain points under that system, and that’s all that matters for a public company.

    IPO’s are dead. VC is dead. Now straight-up stock issues are dead, and corporate bonds are racing them to the bottom.

  17. Merkwurdigliebe says:

    The people who make Madden games shouldn’t be fired; the people who buy Madden games should be shot.

  18. Rog says:

    Black Box was hit hard. Skate 2 was just released, it’s expected to do well, but that didn’t stop the layoffs. Even with the rumours, you don’t really expect it to happen that way, I know a few people that are sitting at home instead of working today. =/

    There’s a bit of anger that stirs up knowing that whatever bottom line and market expectations they think they’re following, EA will probably be making a profit on a game these next few months while most of the people making it will be looking for other work.

  19. Boanerges says:

    While wowpanda may not have correct numbers, consider that, in most cases, the companies are losing money. I’m amazed that so many people think it’s all about stockholders. If you’re losing money you cut expenditures and employees are expenditures. Sony is losing money this year for only the second time in their history. Microsoft saw Apple earn more than they did in 2007. You can either be a charity case and keep employees until you’re forced to close or you can lay some off now and try to make it work from here on out. If you make no money, you go out of business (or are a government entity who gets bailed out).

    While EA will sell units on the Madden games (and any other game teams that got laid off) it remains to be seen whether or not they’ll even break even in terms of sales. Remember that it takes millions to make a video game these days. That’s a lot of units to move.

    As far as the unions, the bulk of the problem is that the unions had crazy demands. Consider that GM is closing plants down. While I would be remiss to say that GM’s woes are solely due to UAW, UAW isn’t helping things. Per union contract the employees of any closed plant get around 90% of their normal paycheck for the next 2 years for doing nothing. Then there’s the “jobs bank” where GM is paying 3500 people not to work. That’s just the tip of the iceberg there. You’ll note that GM needs government money to stay afloat while none of the companies in the list at the top are unionized OR asking for bailout money.

  20. BadMisterFrosty says:

    I am amazed on how bad it seems to be in the US. Really that bad? Sorry folks. Consider relocating to europe. We have civilisation here, too.

    EA and some other companies can afford to fire people, because they seem to expect to get the expertise back anytime they want. And since they know that, they will do the same anytime again. Easy to say from here that potential candiates should grow themselves a spine and not apply there and go for smaller companies who actually value their employees (and help to improve their abilities).

  21. JohnMoore64 says:

    Concerning the unions, I agree the job banks is (was) nonsense. I will not pretend to defend the follies of unions. They are real, and they should be addressed. And if you focus only on what unions do wrong, you can make a very damning case against them. You can blame the burning forest on that one tree.

    But the unions did not start this fire. Labour unions are just one factor the leadership of the Big Three have to deal with. It is one factor in the they have to balance. Management was not innocent babes in the woods, victimized by evil, overpowered workers.

    What bugs me about wowpanda post is how quicly we, as a species, can dichotomize an issue and then blame the problem on the victims.

    It’s the citizens fault for the pain he feels because the citizen tried to live beyond his means. Losing your job,your fault. You wanted a big house. And that was just wrong. Didn’t get a big house? Well, the unions want you to have one as well as free health care, on 30 hours a week. And it’s your fault for working for a big company. Should have stayed with a small company.

    Since this is a gaming blog, I’ll try to put it in gaming terms. It’s like blaming the failure of a new, anticipated, deeply flawed MMO on the players. The creators of the game are not to blame. The players played wrong, wanted too much, want everything for free, are whiners, are lazy, are mouth breathers, are too impatient to wait for the next patch, do not understand the developers vision.

    Well, sometimes the game is just does not work. And right now, our economic system is just not working. The coding is bad, the balance is off, the end game sucks.

    So, I agree with a lot of what Boanerges says. Unions have major flaws. And , yes, none of the companies on the list have unions OR are asking for bailout money. But if you look at a list of companies getting bailout money, most do not have unions. Unless there is a huge bankers union I have not heard about.

  22. Delurm says:

    For every thing that unions do wrong – they do 10 things right.

    1. OMG a union worker gets 30 dollars an hour for their job! How Horrible!

    The CEO of Chrysler keeps his ‘performance bonus’ secret right now – however when he worked for Home Depot, he took in 25 MILLION a year.

    2. OMG a union worker gets 2 years salary if a plant closes!

    Again the same guy got 250 MILLION when leaving Home Depot as a severance package.

    Go figure – the guy tanked Home Depot – got hired by Crysler – and now Chrysler is in the toilet.

    Did anyone stop to figure out why out of the ‘big 3’ one of them didn’t need a dime of handout to stay afloat? I mean they use the same ‘HORRIBLE UNION’ as the other two – why aren’t they in the gutter as well?

    I’m not a big fan of unions – I don’t belong to one nor do I want to. I do not blame them on the evils of mankind though –

    Some things unions did in the name of evil! (otherwise known as reducing shareholder profit by 1-2 cents a share!)

    1. 5 day work week
    2. 40 hours paid with overtime if needed
    3. 8 hour workday
    4. child labor laws (directly because it *was* common to send your kid to work full time at 12)
    5. minimum wage

    Unions can be a bad thing – but as Enron showed us (one example of *many*) so can business.

    BTW – the *law* does not state that public companies must do anything they can to increase shareholder value – actually it’s biased on doing what is healthy for the business – even if that means a devaluation. That’s why yahoo didn’t sell to microsoft and why the ‘shareholder lawsuits’ went nowhere. The mantra that ‘CEO’s must do whatever they can to increase shareholder value’ is pure evil that we seem to have bought into and it’s killing us slowly. CEO’s job plain and simple is to run the company and run it *well*.

    You want something to blame…. blame stock options – pass a law that says executive level positions can no longer receive stock options as part of their compensation and this economic mess will right itself again.

  23. Jonas says:

    @Delurm

    1. 5 day work week
    2. 40 hours paid with overtime if needed
    3. 8 hour workday
    4. child labor laws (directly because it *was* common to send your kid to work full time at 12)
    5. minimum wage

    Unions didn’t do this, technological advancement did. Unions are only responsible for number 4 because they wanted to eliminate competition, and number 5 isn’t even a good thing.

    http://mises.org/freemarket_detail.aspx?control=511

  24. TPRJones says:

    Given the choice between a) “let go lots of employees but stay in business”, and b) “go out of business and let ALL employees go”, which is better?

    Sure, c) “fire the shitty management, make good games, and don’t lay anyone off” IS the best choice, but because of the shitty management it’s not going to happen.

  25. wowpanda says:

    @Delurm
    Unions does good things initially (and sometimes now and then), although I don’t agree totally with your list of 10. It is all about productivity. If it is a 100 year ago, without the tools, the 10 year old has to work in farms or face hunger.

    I have no problems with CEOs taking millions. If they are good ones, they creat jobs for others. If they re bad ones, they are simply liching money away from the major shareholders (usually the biggest of them are some dumb ultra rich guy). When rich dumb guys make mistakes, there is a nature transfer of wealth from them to all who work in the company. The only exception will be when they got bail out money.

    Unions on the other hand, have became so powerful now they are not the old balancer they used to be. They are like a tumor, once they got on to a company, big or small, they slowly choke them. To this day I still don’t understand why they do that.

  26. Iconic says:

    Wowpanda, I feel like I am communing with some one who has somehow found a way to post here from the 1970s.

    Unions are becoming too powerful? Unions are well past their apex of power, and are becoming increasingly weak and irrelevant. Globalization and free trade have once again given corporations (the big multi nationals, at least) the leverage to simply move production to places where unions don’t exist. Even skilled labor can be increasingly outsourced to poorer nations thanks to the internet. This is good for productive efficiency, but doesn’t do very much to control greedy and incompetent management.

  27. Rog says:

    @wowpanda: I also have no troubles with CEOs and other board members taking home millions, but I do believe that it’s always suspect when they lay off employees without first take a reduction cut in their own pay / benefits / etc.. In fact, I think there should be regulations for just such situations.

    I believe in capitalism even if I have some socialist leanings (I believe some things should be handled by government simply because the dream for a small gov’t is an absurd utopia but a responsible gov’t is a more reasonable expectation)– but I digress, that’s just to place exactly where I stand: I absolutely believe there are too many of the wrong regulations for public corporations and not enough of the right ones. And we got this way because of the near-religious two sides of ‘free’ market proponents versus social ideals.

    I agree with Delurm’s sentiment that shareholder value should not be the prime directive. Any company, publicly owned or privately, should first look to the long term health of the company. The shareholder value mantra is one of the biggest causes of an inflationary economy (that eventually, as we’ve learned, must crash).

    This is all philosophical itself of course.. and on that note I’d like to point out:

    EA is not GM.

    Being relatively close to the situation (once removed I’d say, friends that are now unemployed), I have several opinions of why EA took big cuts out of Black Box and they have less to do with sales and profit and more to do with speculation and internal politics. Black Box has done well, but until about a month ago they still operated very independently and have mostly Canadian employees (EA Canada for instance, has a mix of nationalities and is American owned). There are other factors too, but the point is there’s more involved than “stock is down” or “sales are down”.

  28. EpicSquirt says:

    McDonald’s is hiring.

  29. wowpanda says:

    @bog exactly! your post is the middle point where everyone might be coverage on. gov’t can’t be too big or too small, there is a comfort zone somewhere in between. I believe the current size is too big, the evidence is very clear (see all the pork flying?).

    And your statement about shareholders and long term health of their company also applies to this country, as the president should have courage to take care long term health of the country instead bow down to current voter demand.

    Big companies are often plagued with politics, so are big governments. We should never put most of our tax dollar into a big pot and let the Fed share that to failed companies/states. We could have much less corruption if most tax are managed locally.

  30. Iconic says:

    “We could have much less corruption if most tax are managed locally.”

    As a resident of Chicago, Illinois, I must respectfully disagree.

  31. Delurm says:

    @wowpanda

    I don’t have a problem with people being rich – I have a problem when the standards aren’t applied evenly.

    Union guy makes $50 an hour? Good for him. The CEO making 25 mil a year on average make $25000 an hour. Are both of them worth it? That’s the companies decision isn’t it? But don’t try to make me feel bad for a company that pays the CEO so much because they have to pay the little guy too.

    And my comment about stock options wasn’t to lower a CEO’s salary – I say if a company wants to pay the CEO $25 mil a year then let them – but don’t tie his salary to the stock so much that gaming the books/system to increase his personal net worth is more important than the health of the company.

    Greed is a powerful motivator – dangle millions in front of anyone and even if they don’t take it – they had to consider it.

    Morality doesn’t make someone immune from temptation – it just makes them strong enough to resist. History shows us that if the temptation is large enough most will give in – and *that* is where giving huge bonuses through stock options is worthless.

    I suppose there is one other way to do it upon reflection of the matter. Tie the stock options together with a 15 year provision – then and only then will you see CEO’s trying to look further ahead than 2-3 years (when they become vested and get the legal ability to sell these days)

    Pump and dump – it’s not just for short timers anymore.

  32. wowpanda says:

    @delurm I don’t like the over paid leecher CEO’s either, but with 25mil salary, they can only suck some dumb rich investors dry. I am not touched much. In that sense the Unions and CEO’s are doing a good job redistribute wealth the capitalist way.

    The reason I dislike unions in their current state is, they are against competition (which usually leads to higher productivity). And sometimes some of their rules tend to spill out to others. One of my friends told me during her trade show he was not allowed to carry anything himself, because that is against union rules (or some union law).

    What the union should do is, protect basic worker rights, watch the CEOs for possible bad decisions that could doom the company, watch company spending, fire the bad workers. They should realize that their survival is also linked to the company.

    I am not sure about the stack options etc. The best way to make a CEO work hard is that if the company goes under, he will starve. Most small companies work that way. Right now we have too many rich investors just hand their money over to some CEO to handle. Almost no one works on others money harder than their own.

  33. Lee Quillen says:

    “You want something to blame…. blame stock options – pass a law that says executive level positions can no longer receive stock options as part of their compensation and this economic mess will right itself again.”

    And I thought I was th eonly one who argued that usually flamed opinion. As far as I am concerned it is printing cash, and as long as they don’t get greedy they can get away with it. If they get to greedy and tank the stock they end up skipping to the next company after a hefty cash severance package.

    That’s backwards, a “for the good of the business decision” would always be cash for bonusses, stock for severance. Printing stock to give someone cash you don’t want to take from earnings so you can pay him richly at the expense of shareholders should be illegal and it has always amazed me the SEC allows it. Any other organization did the equivalent and they would find themselves in jail.

  34. Viz says:

    Honestly? I think that much worse than the issuance of stock options is the fact that everyone is so obsessed with the stock price when they should be watching business fundamentals instead.

  35. MrLuigi says:

    I am going to avoid the union debate as I do not like getting into it. These EA lay offs are nothing new for us here in Vancouver. On July 2nd Backbone Vancouver did it’s second round of layoffs so from April til July 110 people lost their jobs. Then a couple weeks later Radical did their lay offs. Which was 100+ people. Then EA did a 400+ person world wide layoff so EAC (Burnaby) and Blackbox got nailed for about 70 people I believe. A couple of up and coming companies have faltered and now EA has laid off 200 people in the city. Blackbox was shut down and more are coming to the EAC campus.

    And just yesterday the Vancouver branch of Nexon shut down. Nexon was not in the red and it shut down the studio completely.
    All I can say to people who work in games at this moment is be prepared for anything. It took me 6 months to find something here in Vancouver.

  36. Lee Quillen says:

    “Honestly? I think that much worse than the issuance of stock options is the fact that everyone is so obsessed with the stock price when they should be watching business fundamentals instead.”

    You have to look at both if you on’t want to lose your shirt. It’s quite possible for a company with great fundamentals to be overpriced. While crappy fundamentals will always lose you money in the long run… good fundamentals are not guaranteed to make you money (making money meaning outperforming whatever your favorite indicator is).

    Increasingly I find my selection to chose from decreasing as more and more large companies dilute their stock pretty much solely to support stock options for executive compensation. Company growth ends up being great for a time while stock price sits static. That’s more than a poor investment… that’s getting had.

    Anyhow, really veered the topic off topic when what I should have stuck to was…

    “I feel for anyone losing their job who has difficulty finding further employment in tought times.” 😦

  37. Fuckedcompany.com is having a field day… oh, wait. Nevermind.

  38. Spitt says:

    lol, WoWPanda

    One thing you should know about WoWPanda, is that he owns a bot company (for World of Warcraft). He works out of China.

    Chinese workers work on average, 72 hours a week (6 days). They are harder working then their American counterparts and that’s why most companies outsource whenever possible to other countries (add in Philippines, Thailand, Mexico, etc.). Now mix in lower wages, and you hit a sweet spot.

    Any self employed business owner is used to working at minimum, 60-80 hours or more per week. Self employed workers do not get the benefit of free healthcare. They do not get the benefit or $30 or more per hour. There is much that we (yes, we) do not get the benefit of. I for one would love to see universal healthcare, but to do so, would take us from being the number 1 healthcare country to the average area.

    The economy is tanking. We are heading into a depression, and the bailouts are partly to blame. It’s the government which has failed us, but it was bound to happen sooner or later. We were living on a economy which artificially inflated.

    It’s easy to blame the Unions, and in part, they are to blame. However Bush’s policies are what has caused the economy to slide. I am not saying that Obama is any better, his socialist views are really starting to show now. Clinton had turned this country in the right direction and had reduced our national debt for the first time in many years.

    Overall, unions to contribute to the problem, but to get out of the problem, it would require each auto company, to declare bankruptcy, and only hire non-union members. Alternatively, perhaps it’s time that the unions step up and admit that something is not working, and then work to hammer out deals that SAVE auto manufacturers. Otherwise, I would expect to see Chrysler to close all plants in the USA, and open them in Mexico, where workers work cheaper, harder, and for more hours.

    I told some people back in November that the economy was going to collapse, it’s showing all the signs now of it too (http://rpg-exploiters.com/forums/viewtopic.php?t=58849). How much longer are you going to sit back and take a watch and see, as we go headfirst into a collapsed economy? Get prepared NOW.

  39. Eolirin says:

    Spitt, wow, that’s… completely wrong on just about every factual point.

    Unions have very little to do with the collapse of the auto-industry. People just plain aren’t buying cars anymore, especially not the big SUVs that the big three heavily invested in. Their market has basically collapsed due to the recession and the spike of high gas prices we were having.

    And US workers are legitimately some of the most productive in the entire world, though this is partially due to the benefits of technology. But if you look at the amount of work that a US worker completes in a given interval, it’s comparable or better to most other nations. The reason why companies outsource is because they can pay lower wages and there are less workers rights to run afoul of – basically they can exploit their workforce to greater levels – not because of any sort of productivity gap.

    And the US, when viewed as a whole, is actually well below just about every other industrialized country when it comes to healthcare. Our coverage is more expensive and less effective compared to nations with socialized health care. If you’re super rich, you can afford some of the best medical care in the world, sure. But that’s not an option for 90% of the population which get substandard care instead.

    You also should study history a little more. Attempting to balance the budget would be a huge mistake right now. Examine what happened when FDR attempted to move toward balancing the budget in 37 and the economy basically started to tank again. In times of severe recession the only solution is massive deficit spending because the private sector will simply not invest and you’ve run out of other options. There’s a strong risk of falling into what’s called a liquidity trap like Japan did during the 80s and 90s where people don’t spend money and you’ve got an excess of capacity that’s just plain not being used. In other words, the economy can be fine in terms of fundamentals and still not recover because people won’t buy things or make large business investments. If you look at what FDR did to pull us out of the Great Depresion, the efficacy of public spending should be obvious; WW2 was the single largest public works program ever, in effect. You got near 100% employment, and as soon as the war ended and the rationing and restrictions on certain things got lifted, that money got spent really quickly.

    If you also look at the US between FDR all the way up to Regan, the economy was in the greatest state of prosperity that the country has ever known, with strong GDP and relative economic equality. There were still some problems, and inflation wasn’t understood well enough to deal with it quite right, but things were pretty good. There were also ridiculously high taxes on the super-rich, including an estate tax that pretty much prevented any sort of finacial lineages from developing and unions were at their strongest.

    The idea that unions and high taxes on the rich are inherently bad for the economy doesn’t have any merit, as historically, those things went hand in hand with extreme economic prosperty.

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