Electronic Arts Inc., the publisher of popular videogames such as “FIFA” and “The Sims”, announced on Wednesday that it would reduce its workforce by about 6% and cut down its office space. The move comes as companies in the United States brace for a potential economic downturn, with rising interest rates around the world. EA is the first major videogame publisher to announce job cuts this year.
EA, which had around 12,900 employees at the end of March 2021, expects to incur charges of between $170 million and $200 million for the restructuring. The company’s CEO, Andrew Wilson, stated in a blog post that they are moving away from projects that do not contribute to their strategy, reviewing their real estate footprint, and restructuring some of their teams as they drive greater focus across their portfolio.
Wilson added that EA would provide opportunities for affected employees to move to other projects, and for those who are unable to do so, the company would offer severance pay and additional benefits.
The videogame industry has also been affected by a slowdown in player spending, with a change in fortunes from the meteoric growth witnessed during the pandemic. According to analytics firm Circana, video game sales this year have remained flat, and spending on video game content across platforms is down 2%.