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EA to lay off 5% of workforce, or about 670 employees

Thick Thighs Save Lives

Thick Thighs Save Lives

NeoGAF's Physical Games Advocate Extraordinaire
Electronic Arts announced Wednesday that it will cut 5% of its workforce, part of a plan that includes reducing office space and ending work on some video games.

EA employed 13,400 workers as of the end of March 2023, according to its most recent annual filing with the U.S. Securities and Exchange Commission in May. That means the layoffs may affect about 670 jobs.

The company’s announcement marks the latest headcount reduction among video game developers in recent months, continuing a broader trend of significant downsizing across the tech industry.

On Tuesday, Sony said it would lay off about 900 employees in its PlayStation division, or 8% of its workforce. Last month, Microsoft cut 1,900 jobs across its gaming unit three months after it acquired Activision Blizzard, and Tencent’s Riot Games slashed 11% of its workforce.

EA CEO Andrew Wilson wrote in a memo to employees on Wednesday that the video game company is “streamlining our company operations to deliver deeper, more connected experiences for fans everywhere.”

The cuts will support EA’s “strategic priorities and growth initiatives,” according to a Wednesday filing with the SEC. The company expects its restructuring plan will be “substantially complete” by the end of December.

“We are continuing to optimize our global real estate footprint to best support our business,” Wilson wrote in his Wednesday note. “We are also sunsetting games and moving away from development of future licensed IP that we do not believe will be successful in our changing industry.”

Wilson added that the cuts will enable EA to focus more on its “biggest opportunities — including our owned IP, sports, and massive online communities.”

During the company’s third-quarter earnings call last month, Wilson said the company would focus on continuing to invest in its existing gaming franchises attracting large online audiences, including Apex Legends, Battlefield, EA Sports FC, Madden NFL and The Sims.

image.png

www.ea.com

Continuing to evolve our business and teams

An update on our business from CEO Andrew Wilson
www.ea.com www.ea.com
www.cnbc.com

EA to lay off 5% of workforce, or about 670 employees

EA's announcement marks the latest round of layoffs among video game companies in recent months.
www.cnbc.com www.cnbc.com
 
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BobLeeSwagger

Banned
Said this is another thread:
GlizzyGobbler said:
What studios/developers need to realize is that they can’t continue to get their big budget games greenlit every time.

The solution for the past decade was to increase headcount to get these games out the door. Now it is at the point where it’s not even realistic to keep paying $50M+ a year to pay their hundred of workers and whatever else is needed.

It’ll work for some games that you know will generate profit (Madden, NBA, GTA, COD) but for others, what reasonable investor would greenlight a 4-year $200M+ project?

Developers/Studios need to find ways to make game development more efficient/time-saving and with less manpower.
Click to expand...
 
Saber

Saber

Member
From their speaking I got impression that gonna be probably more by the end of December...
 
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StreetsofBeige

StreetsofBeige

Gold Member
Salty Popsicle said:
Do all these companies come together through some back-channel and decide on a day where they all can announce the bad news together?
Click to expand...
At any given time companies are always analyzing who and what to cut for costs savings. Not just people, but other things that cost money too.

But the best time for any company to cut employees is when others do it, so they can join the pack and hopefully fly under the radar. If a big company takes the plunge and announces firings and they are the only one doing it all month it looks bad as everyone focuses on them

But if they jump into the pool like everyone else they can just claim it's an industry thing and they got no choice. Everyone else is, so they got to too.

It's a strategic way of firing people.
 
SlimySnake

SlimySnake

Flashless at the Golden Globes
Salty Popsicle said:
Do all these companies come together through some back-channel and decide on a day where they all can announce the bad news together?
Click to expand...
Everyone is doing this in the tech industry. 2024 is the year of efficiency. Investors are liking the layoffs not only because the potential company profit margins increase but also because it signals a slow down in the job market which will lead the Fed to cut down the interest rates sooner.
 
Salty Popsicle

Salty Popsicle

Banned
SlimySnake said:
Everyone is doing this in the tech industry. 2024 is the year of efficiency. Investors are liking the layoffs not only because the potential company profit margins increase but also because it signals a slow down in the job market which will lead the Fed to cut down the interest rates sooner.
Click to expand...
No, I mean like did they all decide to announce the layoff news today specifically or was it just coincidence?
 
FoxMcChief

FoxMcChief

Gold Member
We should start a tally of how many people have been laid off this year. I think we’ve past 3,000 so far. Not even March yet.
 
Kacho

Kacho

Gold Member
Bkdk said:
There will be many more layoffs to come after their likely disastrous dragon age 4 launch.
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Yep. The writing will be trash and the gameplay looked dumbed down to hell. I legitimately can't wait to see the backlash.
 
jshackles

jshackles

Gentlemen, we can rebuild it. We have the capability to make the world's first enhanced store. Steam will be that store. Better than it was before.
All the laid off employees from all these companies should get together and try to form their own game company, and actually make good games
 
StreetsofBeige

StreetsofBeige

Gold Member
Kacho said:
Yep. The writing will be trash and the gameplay looked dumbed down to hell. I legitimately can't wait to see the backlash.
Click to expand...
Things are so dumbed down now its insane. At least Japanese game makers still have the balls to make games how they want.

It's a shame old school game makers in the 90s didn't have the budgets and power as modern day PC and consoles.

At that time they did the best they could with double speed CD-roms and VGA monitors and such. The 3D engines were new and crude, and you didn't have online play aside from some rebels that got a shitty modem running. But at the time you could see the vision, no fear, and grittiness they tried to do. The 80s and 90s were the time you saw old photos of them at the office or a some crude video and it was your typical thick rimmed gaming nerds who made the games. No DEI, no overpriced swanky offices, no entitlement attitudes or politics. Just groups of people who enjoyed making games. It was less business, but more genuine. Big corporate studios in modern day is like a chain of overpriced sterile restaurants all over town. It gets the job done if youre hungry, but the staff and shop is really cookie cutter and corporate. Half the people dont even seem to like being there but they need a job. Gaming teams back then making software were more like that awesome one-off restaurant of personable staff and unique menu. And the people working there you can tell love it as the staff and customers are like family.
 
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Quantum253

Quantum253

Gold Member
Salty Popsicle said:
Do all these companies come together through some back-channel and decide on a day where they all can announce the bad news together?
Click to expand...
Probably after Q4 adjustments ( for the next year w/ stake and shareholders) and not hitting goals, organizations adjusting in Q1 for EOY projections. I would imagine you'll see a lot more in the not-so-distant future.
 
jshackles

jshackles

Gentlemen, we can rebuild it. We have the capability to make the world's first enhanced store. Steam will be that store. Better than it was before.
NeoGAF: "Companies need to make cheaper games, so they don't have to sell 20m units to break even"

Companies: "OK, to do that we'll need to lay some people off"
NeoGAF: "
surprised.png
"
 
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N

normalguy09x

Member
Triple-A game development is just really expensive these days. These large companies are just trimming the fat. Especially since the amount of AAA games we get is slowing down as well because of how long they take to make and how expensive they are. These companies are just simply adjusting, and it's not really something to be alarmed about just yet.
 
Salty Popsicle

Salty Popsicle

Banned
Games like EA's Star Wars Battlefront 1 & 2 may have not been very feature rich, but I'm pretty certain they sold a crap-ton of copies when they released in the last console gen. The Star Wars Jedi games also have sold enough to where a third installment is in the works. The fact that EA is now deciding to move away from licensed IP tells me that Disney must be taking a very high percentage of the revenue and EA just doesn't think the hassle and risk associated with game development is worth it if they don't retain 100% of proceeds. I wonder if internally Sony is having similar discussions about the Marvel licensing and the planned X-Men games for the next decade.
 
DavidGzz

DavidGzz

Member
Salty Popsicle said:
Do all these companies come together through some back-channel and decide on a day where they all can announce the bad news together?
Click to expand...


Or maybe this happens more often than we think. Maybe not as many people at once, but similar and we never used to hear about it. The same way we don't hear how they just hired 200-500 people at once in '20, '21 etc, here and there. It wouldn't make the headlines.
 
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Salty Popsicle

Salty Popsicle

Banned
DryvBy said:
Did all these executives give themselves massive raises during the COVID times and now they don't want to cut back?
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When everyone was stuck at home during COVID lockdowns and had nothing to do except buy and play video games all day, I can guarantee you many of these same CEOs who are now laying-off staff looked at the record profits and said to themselves "I did that" with a smug look on their face.

Ron Ogden GIF by The Dungeon Run
 
tmlDan

tmlDan

Member
Salty Popsicle said:
Games like EA's Star Wars Battlefront 1 & 2 may have not been very feature rich, but I'm pretty certain they sold a crap-ton of copies when they released in the last console gen. The Star Wars Jedi games also have sold enough to where a third installment is in the works. The fact that EA is now deciding to move away from licensed IP tells me that Disney must be taking a very high percentage of the revenue and EA just doesn't think the hassle and risk associated with game development is worth it if they don't retain 100% of proceeds. I wonder if internally Sony is having similar discussions about the Marvel licensing and the planned X-Men games for the next decade.
Click to expand...
That's what i suspect as well, I wouldn't be surprised if they stop making Marvel games at Sony after Wolverine, they're getting nickel and dimed when a good video game adds value to Marvel/Disney's IP, it's not just licensing like Disney seems to think.
 
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Alexios

Alexios

Cores, shaders and BIOS oh my!
Electronic Arts gross profit for the twelve months ending December 31, 2023 was $5.856B, a 4.31% increase year-over-year. Obviously this is a hard decision to counter the hard times, the economy, inflation, over-demanding workers, etc. not sacrifices for somebody's bonus lexus for cutting costs...
Gross profit is total revenue minus the expenses directly related to the production of goods or the cost of goods sold (COGS). If they're losing money in other ways that's not on those who get fired but on those who make the decisions and get the big fat bonuses for firing folks free of responsibility.
 
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ReBurn

ReBurn

Gold Member
Salty Popsicle said:
Do all these companies come together through some back-channel and decide on a day where they all can announce the bad news together?
Click to expand...
I imagine some of them are taking the opportunity to cut back while other companies are doing it because the PR isn't as bad as it is if they are the only company doing it. A lot of them also want to hurry and get this done in their current fiscal year so they can have the financial hit behind them and start April with a new plan.
 
B

BobLeeSwagger

Banned
Alexios said:
Electronic Arts gross profit for the twelve months ending December 31, 2023 was $5.856B, a 4.31% increase year-over-year. Obviously this is a hard decision to counter the hard times, the economy, inflation, over-demanding workers, etc. not sacrifices for somebody's bonus lexus for cutting costs.
Click to expand...
I don’t know what you’re reading that says that. I’m seeing $4.4B in gross profit. Even if you subtract all the operating expenses, they barely have a net profit of $1B.

Without factoring in the loans and debt payments, that profit that can be used to fund 4-5 AAA games. But that’s $1B just sitting for another 3-4+ years before anyone can see sales from it. What then? Your current games can only bring in so much profit before the next batch of games come out.
 
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