The long-lasting job cuts happening across many companies in different sectors do not seem to be coming to an end soon as video game company Electronic Arts (NASDAQ: EA) recently revealed plans to dismiss a percentage of its workers. The global economic situation has caused a lot of companies to resort to restructuring, which includes reducing headcounts. Many EV, tech, and other workers have lost their jobs, and many firms are still downsizing. The massive employee dismissal began in 2022 and has continued rapidly this year. Data from Layoffs.fyi shows that more than 156 tech workers at 532 tech companies have lost their jobs in 2023.
Electronic Arts Announces 6% Job Cuts
In a March 27 filing with the SEC, Electronic Arts said its Board of Directors had approved a restructuring plan that includes the job cuts. The company explained that it would dismiss 6% of its workforce, representing about 800 employees. In addition to the job cuts, Electronic Arts also plans to reduce its office space.
According to the filing, the company estimates around $170 million to $200 million in charges under the plan. Primarily, the cost consists of approximately $65 to $70 million in intellectual property impairment-related charges. Also, Electronic Arts estimated that it would use about $55 million a $65 million on severance packages and other costs related to employees for the victims of the job cuts. The company noted that it started communicating its decision earlier in the quarter and will continue till early in the coming fiscal year.
The CEO of Electronic Arts, Andrew Wilson, wrote a note to employees to inform them of the decision.
“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 its teams. These decisions are expected to impact approximately six percent of our company’s workforce.”
While there is provision for severance pay, healthcare benefits, and career transitions, the video game company also offers workers opportunities to transition onto other projects. Moving on from the job cuts, Electronic Arts expects onboard more games to its consumers, “inspiring them to build community, participate in shared fandom, and have joyful experiences.”
Electronic Arts dropped its booking expectation last month as consumers began to slow down on spending. The company expects the annual booking for the current fiscal year to fall between $7.07 billion and $7.17 billion. Meanwhile, the earlier projection was between $7.65 billion and $7.85 billion.
Currently, Electronic Arts stock trades down 0.08% to $119.10 in after-hours trading. The video game company has lost nearly 7% over the past year and 2.45% since the beginning of 2023.
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