Electronic Arts (NASDAQ:EA) layoffs are a hot topic among traders on Thursday as the video game company cuts 6% of workers.
According to a filing, Electronic Arts will suffer charges of $55 million to $65 million in connection to its layoffs. However, the company is expecting more charges as it also plans to close down offices.
In total, EA is expecting charges of $170 million to $200 million as part of a restructuring plan. That includes the employee severance charges, as well as $45 million to $55 million for office closings. $65 million to $70 million comes from intellectual property impairment, and another $5 million to $10 million is tied to other charges.
Electronic Arts isn’t saying exactly how many employees will lose their jobs as part of these layoffs. However, we know the company last employed about 12,900 people at the end of March 2022. That means these layoffs could affect nearly 800 workers.
What’s Behind the Electronic Arts Layoffs?
EA joins a growing list of companies laying off employees due to the current economy. Increasing inflation, rising interest rates, and other factors have been affecting both companies and consumers.
We’ve already seen several big companies besides Electronic Arts announce layoffs in an effort to better handle an economic recession. That’s particularly true for companies in the tech sector, which EA is a part of.
EA stock is largely unmoved from its closing price yesterday as of Thursday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.