Electronic Arts lays off hundreds of workers despite strong profits

Electronic Arts will lay off more than 700 employees — 6% of the video game publisher’s worldwide workforce of roughly 12,900 — CEO Andrew Wilson said on Wednesday.

The mass dismissals come despite a $1.3 billion gross profit that EA reported for its latest fiscal quarter, according to financial statements given to investors in January. Still, the company at the time also lowered its full year profit expectations, despite revenue and profit increases over the same quarterly period from 2022.

“Even amidst macro uncertainty, EA is operating from a position of strength,” Wilson said in announcing the layoffs. He said EA is “gaining momentum,” but still announced the layoffs a few paragraphs later.

Wilson did not specify which segments of the company would be impacted by the layoffs; he said only that EA will pull away from projects that don’t align with its strategy: “building games and experiences that entertain massive online communities; creating blockbuster interactive storytelling; and amplifying the power of community in and around our games with social and creator tools,” he said.

Wilson specifically called out The Sims 4, EA Sports FIFA 23, and Apex Legends for their success. It’s likely the company will focus on support for Madden 23, Battlefield 2042, and beyond, as well as Star Wars Jedi: Survivor once that launches at the end of April. EA developer Maxis is also working on The Sims 5, surely a key project in EA’s portfolio.

Electronic Arts has already said that Battlefield 1943, Battlefield: Bad Company, and Battlefield: Bad Company 2 will be removed from online stores in April, but these catalog reductions don’t seem to be related to the layoffs.

Wilson said some workers may be reassigned to other projects; those who aren’t will get severance pay and “additional benefits.” The company began announcing personnel changes “earlier this quarter,” which are expected to continue into “early next fiscal year,” which starts in October. EA laid off 200 Apex Legends QA testers in February, according to Kotaku.

EA’s significant layoffs follow a number of others by its industry peers: 400 Twitch employees were let go among Amazon’s recent termination of 9,000 employees. Microsoft laid off 10,000 workers earlier in the year, reportedly impacting studios like Starfield developer Bethesda Softworks and Halo Infinite developer 343 Industries. Elsewhere, Take-Two, Unity, and several others have followed suit with layoffs, most citing macro-economic uncertainty.

Big companies typically blame these sorts of layoffs on slowing growth. (EA also stated it was “reviewing” its real estate investments.) Such layoffs may not actually cut costs, some experts say — and the dismissals may simply be companies “copying” their peers, according to The Verge. EA said it expects the layoffs to cost around $170 to $200 million, it wrote in a financial document published today.