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Video game makers Electronic Arts (EA) is cutting 6% of its workforce, the company said in a regulatory filing.
The restructuring move could affect about 800 jobs, the Redwood, California-based company said in the filing with the Securities and Exchange Commission.
The restructuring plan is expected to be complete by September 30, 2023.
The company expects to incur a cost of about $170-200 million for implementing the restructuring plan.
The board of the company led by CEO and chairman Andrew Wilson estimates that the expenses include about $65-70 million in charges related to intellectual property impairment and another $55-65 million in employee severance and employee-related costs. The total cost also includes approximately $45-55 million in office space reductions, and $5-10 million in other charges, including contract cancellations.
“Of the aggregate amount of charges that the Company estimates it will incur, the Company expects that approximately $80 million to $100 million will be future cash expenditures,” according to the filing.
The restructuring plan is “focused on prioritizing investments to the company’s growth opportunities and optimizing its real estate portfolio,” the filing said. “The Plan includes actions driven by portfolio rationalization, including intellectual property impairment charges and headcount reductions impacting approximately 6% of the Company's workforce, in addition to office space reductions.”
A CNBC report said Wilson wrote in a note to the staff: “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.”
The restructuring at Electronic Arts comes in the wake of a massive wave of retrenchments at some big tech and other companies including Google parent Alphabet (GOOGL), Amazon (AMZN), Verizon (VZ) and Microsoft (MSFT).