Maker of football, soccer titles sees $200 million in costs from restructuring
(Bloomberg) — Electronic Arts Inc. will let go of about 6% of its workers as part of a restructuring plan and take charges of as much as $200 million in a challenging year for the video-game industry.
The Redwood City, California-based company’s charges include as much as $70 million for intellectual property impairment, $65 million for employee severance and $65 million in office-space reductions and other expenses, according to a regulatory filing Wednesday. EA employed about 12,900 people globally at the end of its last fiscal year.
“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 our teams,” Chief Executive Officer Andrew Wilson said in a memo to staff. The cuts will take place over the next few months. Some employees may be reassigned.
EA struggled last year to publish a new hit. The company is known for its annual sports franchises, including Madden NFL and FIFA, which will be renamed EA Sports FC after a licensing agreement with soccer’s governing body expired. In January, the company shuttered its Pasadena, California, mobile-game studio Industrial Toys, which worked on a version of shooter Battlefield. It also ended production on the mobile version of the popular shooting game Apex Legends. The racing game Need for Speed Unbound, which launched late last year, received little attention.
The company’s next anticipated blockbuster is Star Wars Jedi: Survivor, which EA delayed until April 28.
In the third quarter, EA’s net bookings fell 9.1% to $2.34 billion, the biggest decline in two years. The video-game industry experienced a contraction in 2022 based on a weak release calendar. Game software company Unity Software Inc., Tencent Holdings Inc.’s Riot Games and Israeli gaming company Playtika Holding Corp. all laid off employees, but EA’s cuts are the largest so far in 2023.
An EA spokesperson declined to comment.
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