Electronic Arts has announced a restructuring plan that includes reducing 5% of its workforce and office space. The company, known for its popular gaming titles like ‘Star Wars Jedi: Survivor’, expects to incur charges of about $125-165 million related to this move. This decision comes as the video game industry is struggling to grow amid high interest rates. Several other gaming companies, including Sony, Microsoft, and Tencent-owned Riot Games, have also laid off employees in recent months due to the slow recovery in the market and high borrowing rates.
In a letter to employees, CEO Andrew Wilson stated that while not every team will be impacted, this is the hardest part of the changes, and the company has deeply considered every option to limit the impact on teams. Out of the charges, approximately $50-65 million will be related to office space reductions, and $40-55 million will be allocated for severance and other employee-related costs.
The plan is expected to be completed substantially by December 31. As of March 31 last year, Electronic Arts had about 13,400 employees, with 65% located internationally, according to a regulatory filing. Earlier this year, the company had already forecasted fourth-quarter bookings below estimates.
Despite these challenges, Electronic Arts remains one of the leading players in the gaming industry. The company’s decision to restructure and reduce the workforce and office space is part of its strategic plan to navigate the current market conditions and position itself for long-term growth. The impact of these changes on the company’s performance and ability to deliver high-quality gaming experiences remains to be seen.
