Electronic Arts announces restructuring plan, 6% headcount reduction

In a regulatory filing, Electronic Arts announced on March 27 that the Board of Directors of Electronic Arts approved a restructuring plan focused on prioritizing investments to the company’s growth opportunities and optimizing its real estate portfolio. The Plan includes actions driven by portfolio rationalization, including intellectual property impairment charges and headcount reductions impacting approximately 6% of the company’s workforce, in addition to office space reductions. The company estimates that it will incur approximately $170 million to $200 million in charges in connection with the Plan. These charges consist primarily of approximately $65 million to $70 million in charges related to intellectual property impairment, approximately $55 million to $65 million related to employee severance and employee-related costs, approximately $45 million to $55 million associated with office space reductions, and approximately $5 million to $10 million of other charges, including contract cancellations. Of the aggregate amount of charges that the company estimates it will incur, the company expects that approximately $80 million to $100 million will be future cash expenditures. The actions associated with the Plan are expected to be substantially complete by September 30, 2023. Certain payments associated with lease obligations will be paid in accordance with their terms.