Video gaming behemoth Electronic Arts, has announced a significant restructuring plan – one that impacts both its workforce and overall operational structure. According to a report filed with the Securities and Exchange Commission (SEC), EA plans to lay off approximately 5% of its workforce, affecting more than 650 employees. At the end of March 2023, the company employed 13,400 people. This decision follows a similar move in March 2023, where the company laid off 6% of its employees (over 770 employees).
These layoffs come at a time when several games are currently in development. With the restructuring, the highly anticipated Star Wars first-person shooter (being worked upon by Respawn) will be among the impacted titles. Ridgeline Games, a Seattle-based studio focused on developing single-player campaigns for the “Battlefield” series, will also be closed.
This development also adds EA to the bandwagon of tech companies laying off employees amid an economic slowdown that began during 2nd half of 2022 and saw massive job cuts, continuing into this year. This year alone has seen over 46,000 employees get the boot by tech companies. The video game industry lost over 6000 workers last month, while more than 10,500 video game workers lost their jobs last year. Earlier this week, Sony’s PlayStation workforce went through a downsizing that impacted around 900 staff, or about 8% of its global PlayStation workforce.
EA currently anticipates to incur significant financial costs associated with the restructuring, estimated to fall between $125 million and $165 million. These costs cover expenses related to office space reductions, employee severance packages, and other transition-related fees. To be precise, $50 million to $65 million will be associated with office space reductions, around $40 million to $55 million will be allocated to employee severance and employee-related costs, while $35 million to $45 million in costs associated with licensor commitments.
With the layoffs and the restructuring, the company aims to to dedicate increased resources to the development and expansion of games based on internally-created properties like the popular Battlefield and Apex Legends franchises, as well as others like EA Sports FC, Madden NFL and The Sims. Furthermore, it aims to drive a continued investment in its established sports titles and popular franchises like “Madden NFL,” as well as foster robust online communities around their games and enhance player engagement and interaction through online features and experiences.
“Given how and where we are working, we are continuing to optimize our global real estate footprint to best support our business. We are also sunsetting games and moving away from development of future licensed IP that we do not believe will be successful in our changing industry. This greater focus allows us to drive creativity, accelerate innovation, and double down on our biggest opportunities — including our owned IP, sports, and massive online communities — to deliver the entertainment players want today and tomorrow. Lastly, we are streamlining our company operations to deliver deeper, more connected experiences for fans everywhere that build community, shape culture, and grow fandom,” EA CEO Andrew Wilson noted in a memo sent to EA employees.
