What Is Important in the Financial World (4/26/2013)
Electronic Arts Layoffs
Electronic Arts Inc. (NASDAQ: EA), which recently dumped its chief executive officer, has decided to cut a large number of workers as well. EA has been unable to make the transition from a company that makes games for old-style consoles to one that makes versions for the growing portable device market, although it has tried. In the fourth quarter of last year, EA revenue fell from $1.06 billion in the period a year ago to $922 million. EA lost $45 million. Mobile revenue was only $86 million. EA's layoff announcement said:
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. We are extremely grateful for the contributions made by each of our employees - those that are leaving EA will be missed by their colleagues and friends.
These are hard but essential changes as we focus on delivering great games and showing players around the world why to spend their time with us.
Gas Prices Boost the Economy
Gasoline prices continue to tick down, and more experts have commented that this should help improve mediocre gross domestic product (GDP) growth in the United States. CNN Money offered a story that said this about gas prices and the economy:
If prices stay that low, the savings for drivers over the course of a year could top $80 billion. That's $80 billion to spend on other things like clothes, electronics or entertainment.
"To put that into context, it is roughly the same size as the sequestration spending cuts that took effect at the start of last month," researchers at Capital Economics wrote in a recent note. As a result, economic growth "might not be as bad as we had initially feared."
AAA Fuel Gauge numbers show that the price of a gallon of regular gas nationwide was $3.505 yesterday, compared with $3.650 a month ago and $3.830 a year ago. The price of premium based on the national average is down to $3.841 from a year-ago price of $4.108. In several states, a gallon of regular has dropped below $3.30.
Air Traffic Controller Furloughs End
The U.S. Senate has passed a bill to end the furloughs of air traffic controllers. This should halt a long series of flight delays that have threatened to gridlock the ability of airlines to have on-time flights. In some cases, carriers have had to cancel service. Fox News reported on the Senate bill to end the furloughs:
The bill passed late Thursday without even a roll call vote, and House officials indicated it likely would be brought up for quick approval there.
Under the legislation, the Federal Aviation Administration would gain authority to transfer up to $253 million from accounts that are flush into other programs, to "prevent reduced operations and staffing" through the Sept. 30 end of the fiscal year.
In addition to restoring full staffing by controllers, Senate officials said the available funds should be ample enough to prevent the closure of small airport towers around the country. The FAA has said it will shut the facilities as it makes its share of $85 billion in across-the-board spending cuts - known as the sequester - that took effect last month at numerous government agencies.
Filed under: 24/7 Wall St. Wire, Market Open Tagged: EA