Electronic Arts to cut 5 percent of workforce, reduce office space

Electronic Arts will cut 5 percent of its workforce as part of a restructuring plan that also includes real estate cuts, the company said Wednesday, as the video game industry struggles to grow amid high interest rates.

The company, which makes game titles like Star Wars Jedi: Survivor, expects to incur about $125 million to $165 million in fees related to the move.

Sony, Microsoft and Tencent-owned Riot Games has also laid off thousands of workers in recent months as the games market slows to recover amid high interest rates on loans.

“While not every team will be affected, this is the most difficult part of these changes and we have carefully considered every opportunity to try to limit the impact on our teams,” CEO Andrew Wilson said in a letter to employees.

Of the charges, about $50 million to $65 million will be related to reductions in office space and $40 million to $55 million to benefits and other employee-related costs, the company said.

Actions related to the plan are expected to be substantially complete by December 31.

As of March 31 last year, the company had about 13,400 people, with 65 percent located internationally, according to a regulatory filing.

EA forecast fourth-quarter bookings below January forecasts.

Last year, EA cut about 6 percent of its workforce and reduced office space, which incurred up to $200 million in related charges.

© Thomson Reuters 2024