Electronic Arts will lay off more than 700 employees, or 6% of the video game publisher’s global workforce of about 12,900 people, CEO Andrew Wilson said Wednesday.
The massive layoffs come despite EA reporting gross profit of $1.3 billion for its last fiscal quarter, according to financial statements delivered to investors in January. Yet the company at the time also lowered its full-year earnings forecast, despite rising revenue and earnings in the same quarterly period from 2022.
“Even in the midst of macro uncertainty, EA is operating from a position of strength,” Wilson said in announcing the layoffs. He said EA was “getting big” but still announced the layoffs a few paragraphs later.
Wilson did not specify which segments of the company would be affected by the layoffs; he only said that EA will pull out of projects that don’t fit with its strategy: “to create games and experiences that entertain massive online communities; creating successful interactive storytelling; and amplify the power of community in and around our games with social and creative tools,” he said.
Wilson specifically called The Sims 4, EA Sports FIFA 23, And Apex Legends for their success. It is likely that the company will focus on support for Madden 23, Battleground 2042and beyond, as well as Star Wars Jedi: Survivor once launched at the end of April. Developer EA Maxis is also working on The Sims 5surely a key project in EA’s portfolio.
Electronic Arts has already said that Battlefield 1943, Battlefield: bad companyAnd Battlefield Bad Company 2 will be removed from online stores in April, but these catalog reductions do not appear to be related to the layoffs.
Wilson said some workers could be reassigned to other projects; those who are not will receive severance pay and “additional benefits”. The company began announcing personnel changes “earlier this quarter,” which are expected to continue into “early next fiscal year,” which begins in October. EA laid off 200 Apex Legends QA testers in February, according to Kotaku.
EA’s significant layoffs follow a number of others by its industry peers: 400 Twitch employees were laid off among Amazon’s recent layoff of 9,000 employees. Microsoft laid off 10,000 employees earlier in the year, which would have impacted studios like star field developer Bethesda Softworks and Infinite Halo developer 343 Industries. Somewhere else, take twoUnity and several others followed suit with layoffs, most citing macroeconomic uncertainty.
Large companies typically attribute these types of layoffs to slowing growth. (EA also said it was “re-examining” its real estate investments.) Such layoffs might not actually cut costs, some experts say — and the layoffs might just be companies “copying” their peers, according to The Verge. EA said it expects the layoffs to cost around $170 million to $200 million, it wrote in a financial document released today.
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