Electronic Arts Trims 6% of Its Workforce as Part of A Restructuring …

Video game company headquartered in Redwood City, California, Electronic Arts (EA) has announced plans to trim its workforce by 6%, which is equal to about 800 jobs, as part of its restructuring plan. The company also announced plans to move away from certain projects and reorganize certain teams as it aims to reduce its office space. According to the company’s CEO Andrew Wilson, he disclosed via a press release that the upcoming layoff implementations were communicated to employees at the beginning of the company’s current quarter.

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In a note to employees, he wrote, 

“As we drive greater focus across our portfolio, we are moving away from projects that do not contribute to our strategy, reviewing our real estate footprint, and restructuring some of our teams. These decisions are expected to impact approximately six percent of our company’s workforce. “This is the most difficult part, and we are working through the process with the utmost care and respect.

Where we can, we are providing opportunities for our colleagues to transition onto other projects. Where that’s not possible, we are providing severance pay and additional benefits such as health care and career transition services.”

EA, which had about 12,900 staff at the end of March last year, expects to incur between £170 million and £200 million in charges related to the restructuring. The game sector has grown over the past decade, culminating in an explosive boom during the pandemic.

Combined sales of games, consoles and subscriptions totalled a whopping £191bn globally in 2021. However, following the uncertain economy, video game sales so far this year were flat and spending on video game content across platforms is down at 2%. Mobile gaming has typically offset the losses in console and PC gaming and has been the largest and fastest-growing sector in the industry for years.

But this year’s decline marks a surprising downturn for mobile.

Mobile game spending in the U.S. continues to decline as consumers contend with both economic uncertainties and a new post-pandemic normal. Electronic Arts had to lower its annual bookings forecast in January after it delayed the release of a game based on the “Star Wars” franchise. Also, video game publishers are struggling with a slowdown in player spending in the face of decades-high inflation, a change in fortunes from the significant growth witnessed during the covid pandemic.

Game software company Unity Software Inc., Tencent Holdings Inc.’s Riot Games, and Israeli gaming company Playtika Holding Corp. have all laid off a part of their workforce, but EA’s cuts are the biggest in 2023.

Other companies that have laid off large numbers of employees due to the uncertain economy, include Take-Two Interactive, Meta, twice, Google, Microsoft, and Amazon.

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