Game company Electronic Arts has announced plans to cut about 6% of staff and reduce office space.
These changes will put about 800 employees out of work. The company is expected to incur fees of between $170 million and $200 million as a result of this restructuring. In a blog post, CEO Andrew Wilson wrote: “When we focus on more focused projects, we will reduce waste, contributing to a long-term restructuring strategy.”
About 6% of employees will lose their jobs, many more will be affected by the restructuring. Dismissed employees will be paid severance pay and additional benefits. Many companies in the gaming industry have laid off employees over the past few years as they try to stay profitable in a challenging market. In the mobile sector alone, Tencent, Sea and Unity have all announced layoffs in the past year. In the first two months of 2023, about 63,000 employees were laid off in the tech sector, according to data from Challenger, Gray and Christmas Inc.
Notably, this also marks EA’s second round of layoffs in less than a month, with the company cutting off its contracted quality assurance team in Baton Rouge, Louisiana on March 1, following when Apex Legends Mobile was canceled. It’s currently unclear where EA is cutting staff or if it plans to eliminate certain teams entirely.
Reuters claims that EA lowered its annual forecast in January due to delays in the release of Star Wars Jedi: Survivor, which could lead to the decision to lay off staff. Electronic Arts is one of the top 50 mobile game makers in 2022. EA’s most recent annual report says it employed 12,900 people globally as of the end of March 2022, when the cutoff. 6% would bring the total number of layoffs to around 775.
EA began notifying employees of layoffs earlier this quarter. Wilson said it expects to continue to notify affected employees early next fiscal year, which begins April 1. EA also filed an 8K form with the Securities and Exchange Commission. Translation, said it expected to incur charges of between $170 million and $200 million due to the restructuring plan. 20222 has seen multiple layoffs across the gaming and tech industries, with Google, Meta, Microsoft, Amazon/Twitch, ByteDance, Unity…
EA has just under 13,000 employees, according to its March 2022 quarterly filing. In January, the company missed estimates for quarterly revenue and issued a weaker-than-expected bookings forecast. Chief Financial Officer Christopher Suh said in the earnings report that EA will be “very cautious,” specifically focusing on “the level of hiring.”