Electronic Arts laying off nearly 800 employees: "We are operating from a position of strength"
Electronic Arts is preparing to lay off hundreds of employees as part of its announced business restructuring. The company plans to only focus on areas that contribute to its long-term growth.
What happened?
- On March 29, Electronic Arts published a SEC filing detailing a restructuring plan approved by the company’s board of directors.
- The publisher will cut roughly 6% of its workforce. Given that it had 12,900 employees (via its annual report for the fiscal year ended March 31, 2022), the layoffs will affect around 775 people.
- EA also plans to prioritize its investments in growth opportunities, while cutting costs in areas that don’t contribute to its long-term strategy.
- The announced restructuring also includes optimizing EA’s real estate portfolio, which means reducing office space.
- According to the SEC filing, these processes will result in around $170 million to $200 million in charges. This includes the $55-65 million related to severance pay and other employee-related costs, as well as $65-70 million in “intellectual property impairment” charges.
- The restructuring is expected to end by September 30.
What does EA management say about the restructuring?
Andrew Wilson, CEO of Electronic Arts, made a separate announcement on the company’s official website. What he called an “update on our business” was also shared with employees .
“Even amidst macro uncertainty, EA is operating from a position of strength,” Wilson said, also outlining the three pillars of the company’s strategy:
- Building games that entertain massive online communities;
- Creating “blockbuster interactive storytelling;
- Empowering the community around its games with social and creative tools.
So Electronic Arts decided to move away from projects that don’t contribute to its growth strategy. “I want to extend my deep appreciation to all our employees who have contributed to our incredible story so far,” Wilson noted, adding that EA will try to move some people onto other projects within the company.
