Electronic Arts announced on Wednesday that it is laying off roughly 5% of its employees as part of a wider restructuring plan approved by its board. As of March 2023, the company that creates Madden and EA Sports FC, among many other non-sports video games, reported 13,400 employees, meaning the staff cuts will affect about 670 individuals.
The company estimates that its 2024 restructuring will cost between $125 million and $165 million. Of that total, just under half will be related to office space reductions and one third will be associated with severance and employee-related costs. The plan also includes an estimated $35 million to $45 million in licensing costs.
There are obvious licensing costs associated with EA’s sports division. For the return of its college football game with EA Sports College Football 25 after a more than decade-long hiatus, EA is sending out NIL offers worth $600 each to more than 11,000 athletes. That equates to more than $6 million in potential deals with individual athletes.
EA Sports also recently rebranded its soccer game, EA Sports FC, after the company’s nearly 29-year partnership with FIFA ended in 2022. According to a Q3 2024 earnings report, the franchise delivered a 7% increase in net bookings versus the prior year despite the absence of the global soccer governing body in the game’s title. The Madden NFL game also achieved 5% net bookings growth.
EA earned $1.95 billion in net revenue during the quarter that ended on Dec. 31, 2023, a 3% increase over the prior year.
The company’s staff cuts follow several other gaming layoffs in 2024. Earlier this week, Sony Interactive Entertainment said that it would lay off 8% of the global workforce in its PlayStation unit. Last month, Tencent’s Riot Games let go of 11% of its staff around the world and Microsoft Gaming laid off 8% of its gaming employees at Activision Blizzard and Xbox. Amazon-owned streaming platform Twitch terminated a much larger 35% of its employees in January as well.
These layoffs are in line with a trend that includes that broader tech industry, as Snapchat, Youtube and other tech giants have also made workforce cuts in the first quarter.
Shares of EA stock were trading at about $138 per share around 11 a.m. Thursday morning. The stock is up 1.7% this year and 25% over the last 12 months.
