Electronic Arts, a leading player in the video game industry, has revealed plans to reduce its workforce by 5 percent as part of a restructuring initiative aimed at streamlining operations.
According to regulatory filings, as of March 31 last year, EA employed approximately 13,400 individuals, with 65 percent of its workforce located internationally, Reuters news report said.
The company also disclosed intentions to downsize its real estate holdings. This move comes amidst challenges in the gaming sector attributed to high interest rates hampering growth prospects.
EA, known for popular gaming titles such as “Star Wars Jedi: Survivor,” anticipates incurring charges ranging from $125 million to $165 million due to the restructuring efforts.
The decision follows similar moves by industry peers Sony, Microsoft, and Tencent-owned Riot Games, which have implemented workforce reductions affecting thousands of employees. These actions reflect the sluggish recovery of the gaming market amidst elevated borrowing costs.
CEO Andrew Wilson addressed the workforce reduction in a letter to employees, stating, “While not every team will be impacted, this is the hardest part of these changes, and we have deeply considered every option to try and limit impacts to our teams.”
The charges associated with the restructuring plan include approximately $50 million to $65 million related to office space reductions and $40 million to $55 million for severance and other employee-related expenses, as per the company’s statement.
The implementation of the plan is expected to be substantially completed by December 31.
In January, EA forecasted fourth-quarter bookings below market estimates, indicating challenges in the online games industry. EA earlier revealed that its bookings for Q3 were $2.366 billion (up 1 percent). EA’s revenue for the third quarter was $1.945 billion.
