Electronic Arts to lay off 5% of workforce, reduce office space

Electronic Arts to lay off 5% of workforce, reduce office space

Electronic Arts will reduce 5% of its workforce as part of a restructuring plan that also includes a reduction in real estate, the company said on Wednesday, as the video game industry struggles to grow amid high interest rates.

The company, which makes gaming titles such as "Star Wars Jedi: Survivor", expects to incur about $125 million to $165 million in charges related to the move.

Sony, Microsoft and Tencent-owned Riot Games have also laid off thousands of employees in recent months due to a slow recovery in the gaming market amid high borrowing rates.

"While not every team will be impacted, this is the hardest part of these changes, and we have deeply considered every option to try and limit impacts to our teams," CEO Andrew Wilson said in a letter to employees.

Out of the charges, about $50 million to $65 million would be related to office space reductions and $40 million to $55 million to severance and other employee-related costs, the company said.

The actions associated with the plan is expected to complete substantially by Dec. 31.

As of March 31 last year, the company had about 13,400 people, with 65% located internationally, according to a regulatory filing.

EA had forecast fourth-quarter bookings below estimates in January.