Electronic Arts to Lay Off 6 Percent of Workforce

JuJu Smith-Schuster of the Pittsburgh Steelers and Young Kiv, Madden 18 Champion, speak on-stage about 'Madden 19' during the Electronic Arts EA Play event at the Hollywood Palladium in Los Angeles, California, on June 9, 2018. (Christian Petersen/Getty Images)

California-based video game company Electronic Arts (EA) has announced that it will lay off approximately 6 percent of its workforce in the coming months as part of its restructuring efforts, which equates to nearly 800 people.

The decision was made after a review of the company’s portfolio, with a focus on prioritizing projects that contribute to EA’s strategic goals.

In a memo to employees, EA CEO Andrew Wilson said that the company is moving away from projects that do not align with its priorities and is reviewing its real estate footprint.

“Now, more than ever, we must be focused on our strategic priorities: building games and experiences that entertain massive online communities; creating blockbuster interactive storytelling; and amplifying the power of community in and around our games with social and creator tools,” Wilson wrote. “These priorities align our investments with opportunities to make the biggest impact.”

EA CEO Andrew Wilson speaks on-stage during the Electronic Arts EA Play event at the Hollywood Palladium in Los Angeles, Calif., on June 9, 2018. (Christian Petersen/Getty Images)

According to a filing with the Security and Exchange Commission (SEC), the company estimates that its restructuring plan will cost roughly $170 million to $200 million, with approximately $80 million to $100 million expected to be future cash expenditures. The restructuring is expected to be completed by Sept. 30.

EA employed 12,900 people globally as of March 2022, with 64 percent located outside the United States, according to an SEC filing.

The decision to restructure some of its teams and review its real estate footprint is expected to impact a percentage of EA’s workforce, although the exact number was not specified.

“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,” Wilson wrote.

“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,” he added. “Communicating these decisions began earlier this quarter and we expect them to continue through early next fiscal year.”

Layoff Trend

EA is a leading developer and publisher of video games, with franchises including FIFA, Madden NFL, Battlefield, and The Sims.

The company reported net revenue of $5.6 billion in fiscal year 2021. However, during an earnings call in January, EA reported revenue that fell short of estimates and a bookings forecast that was not as strong as expected.

Chief Financial Officer Christopher Suh indicated that the company will be cautious in its approach to hiring, paying particular attention to the speed of the process.

EA’s decision to cut jobs is in line with a trend of layoffs in the tech industry. Other companies such as Spotify, Microsoft, Amazon, and Meta have also announced job cuts recently, attributing their actions to slow revenue growth and increasing concerns about the possibility of another recession in the United States.

Kazuma Iwauchi (R) of Irvine, CA plays "Apex Legends" during EA Play 2019 event at the Hollywood Palladium in Los Angeles, Calif., on June 8, 2019. (Christian Petersen/Getty Images)

Layoffs in the tech sector have occurred at a high rate in both 2022 and 2023. Data from Layoffs.fyi suggests that over 155,000 tech industry workers at more than 500 companies have lost their jobs in 2023.

In his memo to EA staff, Wilson highlighted the company’s recent successes, including the upcoming release of FIFA 23, which he said is pacing to be the biggest title in franchise history, and the continued strong performance of Apex Legends and The Sims.

Wilson thanked the company’s employees for their contributions to EA’s success so far and said that the company is focused on bringing more amazing games to more people around the world.

“The future of entertainment is interactive, and no team is better equipped to lead this transformation than us,” he said.