Electronic Arts announces workforce reduction and office space cutback: Report

Electronic Arts (EA), a prominent player in the video game industry, plans to trim its workforce by 5 per cent and downsize office space in a strategic restructuring effort.

This announcement comes while challenges within the gaming sector loom, compounded by high interest rates.

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EA, known for blockbuster titles like "Star Wars Jedi: Survivor," is likely to bearsignificant charges, ranging from $125 million to $165 million, while making theseoperational adjustments.

The move follows major players like Sony, Microsoft, and Riot Games, who areimplementing workforce reductions in response to slow market growth.

Reuters cited CEO Andrew Wilson who addressed the workforce reduction in a letter to employees, where he acknowledged the difficulty of the decision and expressing empathy towards affected teams.

While assuring that not every department would be impacted, Wilson highlighted the consideration given to minimising adverse effects on staff.

The company outlined that a huge portion of the charges would be allocated towards severance packages and other employee-related expenses.

A large portion of the incurred charges, estimated at $50 million to $65 million, will be attributed to reductions in office space.

The restructuring plan is set to be to be completed by December 31.

With a global workforce of approximately 13,400 employees, as of March 31 the previous year, EA's workforce reduction is poised to impact a significant segment of its personnel.

Earlier forecasts by the company had indicated fourth-quarter bookings below analyst estimates.

(With inputs from Reuters)