Electronic Arts Inc (NASDAQ:EA) disclosed plans on Wednesday to lay off 5% of its workforce, approximately 670 employees, as part of a broader strategy to consolidate office space and halt development on certain video games.
This decision reflects a continuation of significant downsizing within the video game industry and the broader tech sector.
The company estimated approximately $125 million to $165 million in total charges for the plan.
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EA's CEO, Andrew Wilson, communicated to employees that this move aims to streamline operations and focus on delivering more immersive and interconnected experiences for gamers globally.
The company proposed to complete the restructuring by the end of December essentially.
Wilson explained that the adjustments align with EA's strategic priorities and growth plans, emphasizing optimizing their global real estate and discontinuing projects involving future licensed IP deemed unlikely to succeed, CNBC reports
The layoffs and strategic shift will allow EA to concentrate on its most promising areas, including proprietary intellectual properties, sports titles, and extensive online communities.
Wilson highlighted the company's commitment to investing in successful franchises like Apex Legends, Battlefield, EA Sports FC, Madden NFL, and The Sims, aiming to strengthen their position in a rapidly evolving industry.
Sony Group Corp (NYSE:SONY) also announced layoffs of about 900 staff members in its PlayStation division, representing 8% of its workforce.
Similarly, Microsoft Corp (NASDAQ:MSFT) and Tencent Holding Ltd's (OTC:TCEHY) Riot Games have recently made substantial job cuts across their gaming divisions.
Roundhill Video Games ETF (NASDAQ:NERD) has close to 10% exposure to Electronic Arts and has gained 0.46% year-to-date.
Price Action: EA shares traded higher by 2.17% at $143.12 premarket on the last check Thursday.
Also Read: Electronic Arts Q3 Earnings Highlights: Sales Miss, EPS Beat, Madden And Soccer Games Power Through
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