Electronic Arts announces restructuring plan, 5% workforce reduction

In a regulatory filing, Electronic Arts said, “On February 27, 2024, the Board of Directors of Electronic Arts approved a restructuring plan focused on aligning its portfolio, investments, and resources in support of its strategic priorities and growth initiatives. These actions are consistent with the company’s ongoing focus to deliver against its long-term strategy to drive durable growth, strong cash-flow, and stockholder returns. The Plan reflects actions driven by portfolio rationalization, including costs associated with licensor commitments, as well as reductions in real estate and headcount, impacting approximately 5% of the company’s workforce. The company estimates that it will incur approximately $125 million to $165 million in total charges in connection with the Plan. These charges consist of approximately $50 million to $65 million associated with office space reductions, approximately $40 million to $55 million related to employee severance and employee-related costs, and $35 million to $45 million in costs associated with licensor commitments. Of the aggregate amount of charges that the company estimates it will incur, the company expects that approximately $105 million to $150 million will be future cash expenditures. The actions associated with the Plan are expected to be substantially complete by December 31, 2024. Certain payments associated with lease obligations will be paid in accordance with their terms.”