Electronic Arts announced on Wednesday that it will downsize its workforce by 5% as part of a restructuring initiative aimed at cutting costs, which also involves reducing its real estate footprint. This decision comes as the video game industry faces challenges in achieving growth amidst high interest rates.
The company, known for popular gaming titles like “Star Wars Jedi: Survivor,” anticipates incurring charges ranging from $125 million to $165 million related to this restructuring.
Similar moves have been made by other major players in the industry, including Sony, Microsoft, and Tencent-owned Riot Games, all of whom have laid off thousands of employees in recent months due to sluggish growth in the gaming market amid elevated borrowing costs.
In a letter addressed to employees, CEO Andrew Wilson acknowledged the difficulty of these changes, 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.”
Of the total charges, approximately $50 million to $65 million will be associated with reductions in office space, while $40 million to $55 million will cover severance and other employee-related expenses. The company expects the actions related to this plan to be substantially completed by December 31.
According to regulatory filings, as of March 31 last year, Electronic Arts employed around 13,400 people, with 65% of its workforce located internationally.
In January, EA had forecasted fourth-quarter bookings below estimates, signaling the need for strategic adjustments to address ongoing market challenges.
