Electronic Arts Inc . (NASDAQ:EA) has announced a restructuring plan that will impact around 5% of its workforce. The decision, approved by the board on Monday, is part of the company's strategy to focus on long-term growth and shareholder returns. The gaming giant is rationalizing its portfolio and aligning investments and resources to support strategic priorities and growth initiatives.
The restructuring includes reducing office space and headcount, which will lead to an estimated total charge of between $125 million to $165 million. This cost includes $50 million to $65 million for office space reductions, $40 million to $55 million for employee severance, and $35 million to $45 million related to commitments to licensors.
The company expects that a significant portion of these charges, approximately $105 million to $150 million, will result in future cash expenditures. The restructuring actions are anticipated to be largely completed by the end of the year.
In a letter to employees sent today, CEO Andrew Wilson detailed the plan, emphasizing the company's commitment to its long-term strategy and the necessity of the restructuring for future success. The full letter is included in the SEC filing made public on Wednesday.
This move by Electronic Arts reflects a broader trend in the gaming industry, as companies adapt to changing market dynamics and position themselves for sustainable success. The information is based on a press release statement.
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