'The Sims' Publisher EA To Cut Workforce By Hundreds After Posting 18% Profits Hike

By Marvie Basilan
03/30/23 

KEY POINTS

EA posted a net revenue of $7 billion for the fiscal year 2022

The 'Sims' publisher reportedly terminated contracts with over 200 QAs via Zoom in February

EA ended its three-decade partnership with FIFA last year

Video game publishing giant Electronic Arts (EA) will reduce its workforce by approximately 6% or between 700 and 800 employees, citing its decision to "drive greater focus" across its portfolio. The company has been closing new deals over the past few months, including one with a Formula One champion.

"As we drive greater focus across our portfolio, we are moving away from projects that do not contribute to our strategy, reviewing our real estate footprint, and restructuring some of our teams. These decisions are expected to impact approximately 6% of our company's workforce. This is the most difficult part, and we are working through the process with the utmost care and respect," EA CEO Andrew Wilson said in a blog post Wednesday.

Wilson said EA will provide options for some employees to be moved to other projects. If a transition is not possible, severance pay and health care benefits will be provided to affected employees. Those who will lose their jobs will also get career services.

Wilson explained that the "decisions" started "earlier this quarter," seemingly alluding to reports about more than 200 quality analysts working on "Apex Legends" losing their jobs in February. Game Rant reported at the time that the layoffs were made months before their contracts officially ended.

Two affected quality testers told TheGamer that it seemed there were no attempts to transition QAs into other games. One worker claimed that EA did not give a reason about why many contracts under the team had to be terminated.

Another affected tester said the layoffs were announced through a "mandatory" Zoom meeting.

"In the call we were told they were doing away with the Baton Rouge QV (Quality Verification) testing team, to move forward with a more diverse global testing team to better reflect the end user," the worker said, as per the outlet.

On its website, EA says it is committed to a work environment that speaks of a "reciprocal relationship" among workers wherein there is consistent engagement and exchange "to create the Best Electronic Arts we can to support our people and deliver on our business goals."

News of the layoffs came two months after the "Sims" publisher reported a net revenue of approximately $7 billion for the fiscal year 2022, as per an announcement made on Jan. 31. The company also said in its financial report that live services and other net bookings increased by 4% year-over-year in 2022.

Gross profits in 2022 reached over $5 billion, accounting for an 18% increase year-on-year, Kotaku reported.

Aside from posting huge profits, EA also bagged a partnership with Formula 1® World Champion Max Verstappen in February. In its press release about the partnership, EA noted that the EA Sports logo would be featured on Verstappen's helmet for the F1 2023 season and that the publishing giant would create content with Verstappen across its portfolio.

Also last month, Sky Sports reported that EA was "close" to signing a contract with the Premier League in England (EPL) for a ₤488 million (approximately $602 million) deal that was expected to bring in more than ₤80 million (approximately $98.8 million) on an annual basis.

It is worth noting that EA Sports ended its partnership with FIFA last year, after three decades of working together. This means EA can no longer use the FIFA name or the World Cup. Reports suggested at the time that one reason for the end of the partnership was due to FIFA asking for over $1 billion for each four-year World Cup cycle.

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In October 2022, the "Madden NFL" publisher also announced a collaboration with Marvel to create three video games on the Marvel universe.

"At Marvel, we strive to find best-in-class teams who can take our characters on heroic journeys in ways they haven't before, and collaborating with Electronic Arts will help us achieve that," Jay Ong, executive vice president at Marvel Games, said in a statement released by EA.

EA revealed at the time that Montreal-based Motive Studio was already in the early stages of developing an "all-new single-player, third-person, action-adventure" video game featuring Iron Man.

The Electronic Arts Inc., logo is displayed on a screen during a PlayStation 4 Pro launch event in New York City, U.S., September 7, 2016. REUTERS / BRENDAN MCDERMID