Today: Electronics Arts confirms that it has laid off workers in attempt to right sinking ship, but does not provide specifics. Also: Zynga and Intuit fall, Apple, Yahoo and Tesla gain.
Electronic Arts lays off unspecified number of workers
The bad news continued to roll out of Redwood City video game maker Electronic Arts on Thursday, as the struggling company confirmed reports of more layoffs without providing specific details.
Kotaku kicked off reports of layoffs at the company Thursday, saying that up to 10 percent -- roughly 900 employees -- would be handed their walking papers. The company confirmed the
"In recent weeks, EA has aligned all elements of its organizational structure behind priorities in new technologies and mobile. This has led to some difficult decisions to reduce the workforce in some locations," read the first two of only four sentences on the matter EA released, under the headline "EA organizational update."
Interim CEO Larry Probst sent out a memo to staff addressing the layoffs, though still avoiding an actual number of workers affected, according to a later Kotaku post that included the reported memo.
"The workforce reductions which we communicated in the last two weeks represent the majority of our planned personnel actions. We are extremely grateful for the contributions made by each of these individuals — they will be missed by their colleagues and friends at EA," the memo read.
Reports of actual layoffs centered on faraway offshoots of the company, though workers in Redwood City were let go, according to an employee there. Employees in Emeryville and other offices nationwide said they did not know of layoffs at their offices Thursday.
Game Informer reported that EA was shutting down its Partners program, which contracts with independent developers to publish games, and several reports said layoffs were occurring at Canadian EA studios for previous acquisitions PopCap and Quicklime.
"Quicklime studios at EA Canada was just shuttered. All employees laid off. Mobile studio," a Twitter user with the handle @kindelingboy wrote Thursday. He said on Twitter that he worked in QA at the Quicklime studios and had been laid off, but was given the opportunity to apply for jobs elsewhere within EA.
EA has suffered recently: Degrading revenues led to the resignation of CEO John Riccitiello, and the company is still looking for a replacement. EA's reputation with gamers has received even more damage than with investors, as EA was recently voted the worst company in the world for a second consecutive year after the high-profile launch of its newest "SimCity" game failed to launch due to server problems.
Electronic Arts stock ended the day with a 0.8 percent gain at $17.94, with little movement in after-hours trading; the company plans to announce its quarterly earnings results May 7.
Zynga and Intuit see stocks fall after earnings reports
The earnings results for an EA rival took their toll Thursday on Wall Street, as Zynga stock fell 10 percent, but trimmed some of those losses by the end of the session.
After reporting a big drop in users Wednesday, Zynga fell lower than $3 a share in after-hours trading, but Thursday's descent wasn't that steep -- shares in the San Francisco company declined as low as $3.01 before trending up and closing at $31.13, a 6.5 percent decline.
Still, analysts expressed displeasure with Zynga's earnings report, especially the slow progress on mobile games, which they said would not be cured with Wednesday's announcement of the launch of "Draw Something 2."
"Zynga is unlikely to ever dominate the mobile gaming market in the same way that it has the web-based gaming market for many years," Wedbush Securities analyst Michael Pachter told Reuters.
Mountain View software firm Intuit also took a long fall after its Wednesday earnings report and recovered, but its final standing was not as strong as even Zynga's: The maker of QuickBooks and TurboTax software declined 11.1 percent to $57.09 after earlier falling as far as $55.54.
The company said tax season was not as kind to its revenues as it had been in years past, which obviously concerned investors and analysts.
"Consumer tax contributes about 45 percent of total company operating income annually and any slowdown in that highly profitable business will slow profitability growth for the rest of the company," Raymond James analyst Wayne Johnson wrote in a note.
Tech stocks gain as Apple rebounds, Tesla pops higher
Aside from those issues, however, tech stocks had a strong day, with the Nasdaq leading the three major U.S. stock indexes with a 0.6 percent gain and the SV150 moving 0.2 percent higher.
Apple gained after Wednesday's slight drop, showing that its first year-over-year profit decline can be overshadowed by its large cash return to shareholders; the Cupertino company gained 0.7 percent to $408.38. Google dropped 0.5 percent as details about its proposed deal with European regulators were made public, but the Mountain View search giant stayed above $800 at $809.10.
Facebook shares gained 0.1 percent to $26.14 as the Menlo Park social-networking concern said that an internal audit showed its privacy efforts were paying off, and Yahoo hit a new 52-week high and closed with a 1.8 percent gain at $25.20 before losing its chairman in post-bell announcement. LinkedIn again hit an all-time high after announcing a new Contacts app, SolarCity established a new all-time closing high for the fourth consecutive day, and Tesla closed with a 3.1 percent gain after CEO Elon Musk tweeted that he would have yet another big announcement, this one Friday.
Silicon Valley tech stocks
Up: Ruckus, Applied Materials, Workday, Tesla, Splunk, AMD, SolarCity, Yahoo, Yelp, Gilead, Juniper, Cisco, VMware, Adobe, Nvidia, EA, Apple
Down: Intuit, Zynga, Netflix, Hewlett-Packard, Intel, eBay, SunPower, Oracle, Google
The tech-heavy Nasdaq composite index: Up 20.34, or 0.62 percent, to 3,289.99
The blue chip Dow Jones industrial average: Up 24.5, or 0.17 percent, to 14,700.8
And the widely watched Standard & Poor's 500 index: Up 6.37, or 0.4 percent, to 1,585.16
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.