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Electronic Arts to eliminate 6% of its workforce

Electronic Arts to eliminate 6% of its workforce
Electronic Arts estimates to incur up to $200 million as restructuring expenses.


American video game company Electronic Arts Inc. on Wednesday announced to lay off 6% of its workforce and a reduction of its office space. Electronic Arts is the company behind popular video games Battlefield, Need for Speed, and The Sims along with EA Sports titles FIFA, NBA Live, etc.


“As we drive greater focus across our portfolio, we are moving away from projects that do not contribute to our strategy, reviewing our real estate footprint, and restructuring some of our teams. These decisions are expected to impact approximately six percent of our company’s workforce,” the company’s chief Andrew Wilson said in a blog.


Some of the affected employees will be provided with the opportunities to transition to other projects, while others will be provided with severance pay and additional benefits such as health care and career transition services, Wilson added. Electronic Arts had already started communicating these decisions earlier this quarter and expects them to continue through early next fiscal year.


Furthermore, the company estimates to incur approximately $170 million to $200 million in charges in connection with the restructuring plan. These charges are related to intellectual property impairment, employee severance and employee-related costs, and office space reductions, among others.


With this, EA becomes the first major videogame company to announce layoffs. It is noteworthy that high inflation in most world economies has impacted the sale of video game publishers, which were already struggling to cope with the reversal in demand post the Covid-19 pandemic. According to a Reuters report, citing analytics firm Circana, sales of video games so far this year were flat, and spending on video game content across platforms is down 2%.


In the past, several companies including Mark Zuckerberg-led Meta, Sundar Pichai-led Alphabet, Elon Musk-led Twitter, and Satya Nadella-led Microsoft, among others, have laid off thousands of employees in an attempt to gear up for a global economic slowdown. Walt Disney, Microsoft-owned GitHub, and electric carmaker Lucid are some prominent names that announced job cuts just at the start of this week.

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