Yahoo Finance EA shares inch higher after video game maker unveils 6% workforce cut
By Scott Kanowsky
Investing.com -- Analysts on Thursday said they were widely unsurprised by Electronic Arts' (NASDAQ:EA) decision to trim its workforce by about 6% and cut back on office space, arguing that the move was broadly foreshadowed by the group.
In a note released after the close of U.S. markets on Wednesday, chief executive officer Andrew Wilson told employees that the firm will be restructuring some of its teams and reviewing its real estate holdings in a bid to "drive greater focus across our portfolio."
According to a filing with the Securities and Exchange Commission, EA expects to incur between $170 million to $200 million in charges in connection with the overhaul. The actions associated with the plan, EA added, are projected to be "substantially complete" by September 30.
California-based EA's headcount came in at a little under 13,000 at the end of March 2022, a quarterly filing showed. Although the group did not confirm exactly how many workers would lose their jobs, analysts' estimates equate a 6% reduction in staff to approximately 800 employees laid off.
"Where we can, we are providing opportunities for our colleagues to transition onto other projects. Where that's not possible, we are providing severance pay and additional benefits such as health care and career transition services," Wilson said. "Communicating these decisions began earlier this quarter and we expect them to continue through early next fiscal year."
Shares in EA edged slightly higher after hovering near the flatline in early U.S. trading today.
In a note to clients, analysts at Baird that the job cuts are a "step towards achieving more consistent bookings and profit performance," adding that it makes sense for EA to focus on its more established gaming titles like its mega-popular FIFA soccer franchise and shooter Apex Legends.
Analysts at Baird also noted that the cutbacks were in line with their expectations, and follow a similar trend of layoffs seen recently throughout the technology sector.
Related Articles
EA shares inch higher after video game maker unveils 6% workforce cut
Icahn, Illumina discussed settlement before proxy fight - filing
Volcon launches Grunt EVO and Runt LT electric off-road motorcycles
