http://www.vancouversun.com/Business/announces+significant+layoffs+Vancouver+Black+studio/1207476/story.html
Electronic Arts has confirmed that it was making significant layoffs at its Black Box studio in Vancouver. Colin Macrae, Electronic Arts' director of communications, has said that this was part of the company's restructuring plan to save $120 million a year. EA has said that it planned to reduce its workforce by 10% and the cuts are to be finished by the end of March. It is rumored more than 200 people were expected to lose their jobs. This decision according to Macrae was about cost reduction and not related to the products that they produce which is the popular Skate and Need for Speed games. He also said that Vancouver is an expensive place to do business because of the competition for talent and the cost of real estate.
This chapter deals with economic indicators and there is much emphasis on unemployment. I believe that this type of unemplyment is demand-deficient unemployment. This type of unemployment states that this will happen when there is a lack of spending in the economy. As we all know, the economy is in a state of uncertainity. People are afraid to spend money and instead save money for the future. As people are saving money, business are losing money due to the lack of spending from the overall population.
It saddens me to see yet another company layoff their workers because of the economic conditions at this present time. More and more workers are out of jobs and this will only encourage people to not spend money. The gaming industry has suffered enourmously due to the economy. This is not an isolated incident, many video game companies are also laying off their workers. Video game designers are not in demand anymore. By having more layoffs, it is true that the company can save money, but the employees there will have more of a workload and the quality of their products will not be as good as it used to be. This will likely result in teenagers and young adults not buying the products because of the quality of the game.
2 comments:
I agree with what you said about the fact that it's sad that layoffs seem to be increasing because of the poor economy. Like you said, this discourages people to spend more money, so if that happens, the economy will stay in its current condition. People need to start spending money in order to get out of this economic crisis. Of course, that's not going to happen if people are being laid off and are out of work. You mentioned that the employees that still have their job will need to work even harder to make up for all of the laid off workers. This is also true and will probably affect companies even more; less workers and remaining workers having to work harder to produce less-than-perfect products doesn't sound very good.
A. Chow
Indeed the current economic situation has forced companies to fire workers in order to prevent bankruptcy. As more people are losing their jobs, consumers are less willing to spend money on unnecessary items. Since disposable income for a majority of the population has decreased significantly in the past months, it is expected that the decline in demand for games and other products for entertainment is seen first, as these products are not a necessary for survival. On the other hand, the prices of food products and other essential products have increased in the past few months.
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