Electronic Arts is closing their Casual Label, merging it and their Hasbro partnership with The Sims Label, Electronic Arts confirmed to Kotaku this morning.

The publisher also confirmed the departure of Kathy Vrabeck, who was named president of EA Casual in May 2007. Vrabeck was the president of Activision Publishing prior to her stint at Electronic Arts.

The new Sims and Casual Label moniker comes two years after the publisher created a casual-centric label for their development studios.

In a prepared statement Electronic Arts explained the reasoning behind the decision and said that further announcements about EA Mobile, Pogo, Media Sales and Online Casual Initiatives will be coming in the days and weeks ahead.

We’ve learned a lot about casual entertainment in the past two years, and found that casual gaming defies a single genre and demographic. With the departure of Kathy Vrabeck, EA is reorganizing to integrate casual games — development and marketing — into other divisions of our business. We are merging our Casual Studios, Hasbro partnership, and Casual marketing organization with The Sims Label to be a new Sims and Casual Label, where there is a deep compatibility in the product design, marketing and demographics.

In the days and weeks ahead, we will make further announcements on the reporting structure for the other businesses in the Casual Label including EA Mobile, Pogo, Media Sales and Online Casual Initiatives. Those businesses remain growth priorities for EA and deserve strong support in a group that will compliment their objectives.

The decision to absorb the Casual Label into a variety of other studios within EA comes a week after Electronic Arts laid off 600 of their employees and told investors that they were posting a $310 million net loss for the quarter.

Earlier last month Rod Humble took over The Sims label, replacing Nancy Smith who was to be stepping into a yet-to-be named executive role at EA. Maybe it has something to do with this reorganization?