Electronic Arts says it is laying off 6% of its workforce

Electronic Arts inc

EA 0.99%

said it is laying off about 6% of its workforce and reducing its office space to focus its spending on the best growth opportunities in the video game industry.

The maker of hit franchises like Madden NFL and The Sims hasn’t said how many people will be fired or from which departments. In the middle of last year there were still almost 13,000 employees. That would lead to job cuts of around 780 jobs. The company plans to relocate some of the affected employees to other areas.

According to EA, the layoffs began earlier this quarter and are expected to continue into the next fiscal year, which begins in April. The Redwood City, California-based company also announced that it is cutting real estate spending and restructuring some teams.

“Now more than ever we need to focus on our strategic priorities,” EA chief executive Andrew Wilson said Wednesday in a statement prepared for an employee blog post. “These priorities align our investments with opportunities to make the greatest impact.”

Pictured: Adele Morgan

The announcement makes EA the first major video game publisher to announce significant layoffs. The industry has so far been largely sheltered from the downsizing that has taken place at many tech companies, including Amazon.com inc,

Microsoft corp

and Facebook’s parent meta-platforms inc

Tech leaders have blamed everything for the layoffs, from slowing demand and advertising to the need to downsize teams after over-hiring in recent years.

In February, EA’s shares fell about 12% after the company reported a rare miss of fiscal third-quarter guidance and plans to cancel two mobile games. At the time, Mr. Wilson said the company was taking “strategic actions to assess our cost structure as we navigate the current macro environment.”

The video game industry had a challenging start to the new year after player spending slowed, reversing some of the outsized growth seen during the pandemic. Other major publishers including Ubisoft Entertainment SA

and interactive Take Two software inc,

have also recently made strategic changes.

In a securities filing, EA said it estimated it would incur costs of approximately $170 million to $200 million related to the layoffs and other restructuring measures, which are expected to be completed by the end of September.

EA’s shares are down about 3% so far this year. The Nasdaq Composite Index fell nearly 14% over the same period.

Write to Sarah E. Needleman at Sarah.Needleman@wsj.com

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Source : www.wsj.com

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