In a wave of layoffs hitting the technology and gaming sector, Electronic Arts (EA) announced plans to cut approximately 670 employees, or about 5% of its workforce. The Redwood City, California-based company said the layoffs are part of a broader restructuring plan that includes closing some offices or facilities. EA CEO Andrew Wilson stated that the goal is to provide affected employees with opportunities to transition onto other projects, and the layoffs are expected to be largely completed by early next quarter.

The company estimates it will incur about $125 million to $165 million in total charges related to the restructuring, with approximately $50 million to $65 million in charges associated with office space reductions and about $40 million to $55 million related to severance and employee-related costs. This news comes just days after Sony announced it would cut about 900 jobs in its PlayStation division, or about 8% of its global workforce, citing changes in the industry as a reason for the restructuring.

EA also indicated plans to make changes to its future content slate, sunsetting games and moving away from the development of future licensed intellectual property that they do not believe will be successful in the changing industry landscape. The video game industry has seen significant job cuts over the past year, with EA itself laying off around 800 employees last year and other companies such as Epic Games, Tencent's Riot Games, and Microsoft making similar moves.

Despite these layoffs, EA's stock closed up nearly 0.5% on Wednesday, with shares rising nearly 27% from the previous year. The company's most recent annual report stated it had 13,400 employees as of March 31, 2023, meaning Wednesday's layoffs could affect more than 600 workers. Sony Interactive Entertainment CEO Jim Ryan also announced layoffs in the PlayStation division, with about 900 jobs being cut as part of efforts to future-proof the business and continue delivering top gaming experiences to the community. The job cuts will occur across various regions, with the PlayStation Studio in London set to close completely. Ryan emphasized that despite the challenging times, the goal is to remain agile and adaptable to focus on delivering the best gaming experiences now and in the future.