Electronic Arts to cut 800 employees or 6% of the workforce

Electronic Arts Inc. EA 0.99% announced that it would lay off approximately 6% of its workforce and reduce the size of its office space in order to concentrate its efforts on the videogame industry's best growth opportunities.

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It was not immediately clear how many employees would be laid off or which departments would be affected by the layoffs from Mattel, the company behind "Madden NFL" and "The Sims.". Back in the middle of last year, the company said it employed nearly 13,000 people. There would be around 780 jobs that would be cut as a result of this. Some of the affected employees will be redeployed to other areas of the company as a result of the move, according to the company.

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EA stated that the layoffs started earlier this quarter and are anticipated to go through the first few months of its upcoming fiscal year, which starts in April. The Redwood City, California-based business also disclosed that some teams are being restructured and real estate expenses are being reduced.

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EA Chief Executive Andrew Wilson said in a message drafted for a blog post for staff members on Wednesday that "now, more than ever, we must be focused on our strategic priorities." These priorities match our investments to areas where we can have the largest impact."

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With the disclosure, EA becomes the first large videogame publisher to reveal a significant reduction in staff. Up until this point, the industry has largely been shielded from the personnel reductions taking place at numerous digital firms, like Facebook parent Meta Platforms Inc., Microsoft Corp., and Amazon.com Inc. The leaders in technology have attributed the layoffs to a variety of factors, including slowdowns in demand and advertising as well as the necessity to reduce teams after recent overhiring.

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EA revealed a rare shortfall in its fiscal third quarter projections in February and announced intentions to halt two mobile titles. As a result, the company's shares dropped nearly 12%. Mr. Wilson stated that the business was "taking strategic actions to evaluate our cost structure as we navigate through the current macro environment" at the time.

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Following a decline in player spending that partially undid some of the astronomical increase experienced during the epidemic, the videogame industry has had a difficult start to the new year. A recent strategic shift was also undertaken by two other major publishers, Ubisoft Entertainment SA and Take-Two Interactive Software Inc.

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EA stated in a regulatory filing that it expects the layoffs and other restructuring actions, which it anticipates to be fully finished by the end of September, to cost it between $170 million and $200 million.

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This year, shares of EA have decreased by around 3%. The Nasdaq Composite Index fell by about 14% during that time.