Since neither The Lord of the Rings: Conquest or Mercenaries 2: World in Flames were met with warm reception, the Internet seems to have collectively decided that the widespread layoffs at Pandemic and integration into EALA was single-handedly due to those two games.
Speaking to Kotaku, EA CEO John Riccitiello wanted to make it perfectly clear there were more important factors that ultimately decided the studio's fate. The "bloody expensive" nature of running a business in California was one such reason, with the locations of EALA and Pandemic being so close to each other only further hurting the situation.
He also says "the shift toward fewer titles" combined with digital distribution becoming increasingly important every day also factored in the decision. "It's not a packaged goods business any more," Riccitiello believes.
In closing the discussion, he also mentions how Pandemic will live on with Mercs: Inc and if enough people enjoy The Saboteur, that game could potentially see a sequel.