Electronic Arts (EA), a significant player in the video game industry, has unveiled intentions to reduce its workforce by 5 percent and scale down office space as part of a strategic restructuring initiative.
This announcement arrives amidst looming challenges within the gaming sector, compounded by elevated interest rates. EA, renowned for hit titles such as “Star Wars Jedi: Survivor,” anticipates incurring substantial charges ranging from $125 million to $165 million due to these operational adjustments.
The decision comes in the wake of other major players like Sony, Microsoft, and Riot Games implementing staff reductions in response to sluggish market growth.
CEO Andrew Wilson, as cited by Reuters, addressed the workforce reduction in a letter to employees, acknowledging the difficulty of the decision and expressing empathy towards affected teams. While assuring that not every department would be impacted, Wilson underscored the careful consideration given to mitigating adverse effects on staff.
The company detailed that a significant portion of the incurred charges would be allocated towards severance packages and other employee-related expenses. A substantial portion, estimated at $50 million to $65 million, will be attributed to reductions in office space.
The restructuring plan is slated for completion by December 31. With a global workforce of approximately 13,400 employees, as of March 31 the previous year, EA’s workforce reduction is poised to impact a significant segment of its personnel.
Earlier forecasts by the company had indicated fourth-quarter bookings falling below analyst estimates.
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