Electronic Arts (EA), a prominent video game company, announced that it will be laying off employees as it moves away from projects that do not align with its strategy. The company expects to incur expenses of $170 million to $200 million related to these moves. The layoffs will continue until early next fiscal year and will affect almost 6% of its global workforce, or approximately 700-800 people.
Restructuring of the Company
The decision to lay off employees was made after reviewing upcoming projects, restructuring some teams, and reviewing the company’s “real estate footprint.” The affected workers will be offered the opportunity to transition to other roles within the company or receive severance pay, company-paid health insurance, and career transition services.
CEO Andrew Wilson announced the decision on EA’s website and stated, “We’re driving greater focus across our portfolio in order to deliver fewer, better games and services for our players.”
Video Game Industry Struggles with Slowdown
The video game industry has seen fewer layoffs than other tech sectors but is experiencing cuts due to the slowdown in growth. Electronic Arts is not alone in this trend as two other video game companies, Unity Software and Riot Games, also laid off some employees earlier in January.
The most difficult part for companies like EA is providing opportunities for colleagues to transition onto other projects. The job cuts are a result of EA deciding to move away from projects that no longer align with its goals.
Cost Cutting Measures
The video game industry as a whole is struggling with a slump in player spending since 2022, which has led EA to implement several cost-cutting measures over the past months. This includes shutting down Apex Legends Mobile and Battlefield Mobile. They also reportedly cancelled an unannounced single-player game set in the Titanfall and Apex Legends universe.
Despite these challenges, the company generated approximately $7 billion in net revenue last year and had gross profits of over $5 billion. This announcement comes just a month after 200 testers working on the company’s series were laid off via Zoom call.
Company’s Future Plans
Wilson ended his address by stating that the company is focused on bringing more amazing games to more people around the world and that they are equipped to lead the transformation of the future of entertainment. EA is moving away from projects that do not contribute to its strategy and is positioning itself for growth in the years to come.
In conclusion, EA’s decision to lay off employees is a reflection of the challenges facing the video game industry due to slowed growth. However, their cost-cutting measures and focus on delivering fewer, better games and services show that they are positioning themselves for a strong future.
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