Technology firms have led the latest round of layoffs as US companies brace for a potential economic downturn amid rising interest rates.
Electronic Arts said on Wednesday it would lay off about 6 percent of its workforce and reduce office space, making it the first major videogame publisher to announce job cuts.
Technology firms have led the latest round of layoffs as US companies brace for a potential economic downturn amid rising interest rates around the world.
Meta Platforms and Amazon.com announced a second round of job cuts this month. Tech layoffs hit 63,000 in the first two months of the year, according to data from Challenger, Gray & Christmas Inc.
EA, which had about 12,900 staff at the end of March last year, expects to incur between $170 million (roughly Rs. 1,398 crore) and $200 million (roughly Rs. 1,644 crore) in charges related to the restructuring.
“As we drive greater focus across our portfolio, we are moving away from projects that do not contribute to our strategy, reviewing our real estate footprint, and restructuring some of our teams,” CEO Andrew Wilson said in a blog post.
EA, behind the “FIFA” soccer videogame franchise and “The Sims”, will provide opportunities for employees to move to other projects and where that is not possible will provide severance pay and additional benefits, Wilson said.
Video game publishers are also struggling with a slowdown in player spending in the face of decades-high inflation, a change in fortunes from the meteoric growth witnessed during the pandemic.
Video game sales so far this year were flat and spending on video game content across platforms is down 2 percent, according to analytics firm Circana.
Electronic Arts lowered its annual bookings forecast in January after it delayed the release of a game based on the “Star Wars” franchise.
Newly launched Hogwarts Legacy game from Warner Bros Discovery topped the videogame sales charts in February, according to Circana.