EA Cuts Roughly 700 Jobs in Another Round of Industry Layoffs

Remember when Iwata took a big pay cut so he didn't need to sack his staff? Its a shame so few people are like him in the gaming world.

Don't join the video game industry. Noted.

Respawn gave EA a massive win with Apex Legends.

They’re rewarded with layoffs and cancelled projects.

Star Wars is a massive brand and this is an in form studio. I guess they have their reasons but all this news just doesn’t seem good for the industry.

Especially when this sort of game was likely to make bank in the long run.

I really hope all these talented developers join more AA and indie teams. It's pretty clear the AAA market is stagnating and only capable of creating garbage because of their insatiable greed. Let's hope the rise of AA studios can breathe new life into the industry.

Record profits, record layoffs. All of these poor wittle American corporations are making BANK and it's still not enough. The corporate cutthroats finally, sadly found out how truly valuable gaming was in 2020 and here we are. The western game dev part of the industry is cooked.
Please, Nintendo, just stay true to your ways. For the GOAT Iwata.

Was really looking forward to Respawn’s Star Wars FPS, too.

"away from development of future licensed IP that we do not believe will be successful in our changing industry"

Not surprising. The only company that had any success with licensed IPs so far is Sony. Every other licensed IP release has been terrible to eh, and that don’t count the massive cost to hold ownership of the license… I wonder what Disney is going to do with a lot of companies turning away from licensing their IPs? Start another publishing arm and bring them back in house?

We’re looking at one of the worst years for gaming in a long while. The issues that presented themselves in 2023 (rise of AI in the artistic process, inflating budgets, increasing prices, and layoffs) all seem to be exponentially increasing. There aren’t even that many major game releases this year to make up for it. I would not be surprised if this year represents a major turning point in the AAA industry.

Stop… it’s already dead! 😫

The issue is that post 2020 these companies - and many software companies outside of the games industry over hired. As companies look at the future forecasts they can’t keep people employed and working on projects that won’t be profitable.

The executives should have known 2020 and 2021 were anomalies - but it’s better for them to cut employee bloat now before they start to sink. People losing their jobs sucks but if you don’t want game prices to go up or an influx of crappy half baked products flooding the market this is probably good for the future health of the industry..

@Ajbr8687 If the executives caused these problems, then why not cut executive pay or fire them?

@JSnow2 EA saw a -6.89% drop in EBITDA in 2023.

Sony saw a -6.77% drop in EBITDA in 2023.

Can’t expect companies to keep employees around when business health is declining…

@Deoxyr1bose I’m not saying the executives that made the decisions shouldn’t get canned. They probably should - their assessments of the situation was stupid.

Pay cuts don’t really do much though. Cutting 600+ employees plus benefits is probably saving EA around $60 million. Executive pay cuts can’t ever free up that much cash…

They SHOULD take one in order to keep their current employees from going nuts and they should spread some of the savings out to their employees that stay…but who knows if they actually will.

Not defending the corporations…just giving a peak into corporate workings.

Edited for spelling.

Rome is burning.

I would love for someone to explain to me why this is happening so much? I felt like I was just reading about the gaming industry making record profits.

Tbf over the last 3-4 years the only game EA have brought out that I've enjoyed is Apex Legends. With the Star Wars game cancelled maybe it's time Respawn made Titanfall 3 as that fits the bill as their owned IP and massive online community given how popular it was.

So many companies these days chasing these Licensed IP's thinking they will make them big bucks yet fail, all whilst sitting on great IP's of their own which would sell just as good.

@Ajbr8687
The problem with businesses nowadays is that they can only succeed if they're constantly turning a profit, constantly growing. If they didn't make as much as last year then that's a loss in their books. Unchecked capitalism is dangerous because it becomes more and more unrealistic to reach those higher highs, which is why many developers resort to riddling games with microtransactions in a desperate attempt to match stellar years they may have had. Investors are just screaming at them "Make more than the last one!" And setting impossible goals. While there's not one true "bad guy" here, I pin most of the blame on the investors that don't understand how the industry works and making impossible demands.

@Ken_Kaniff read my comments above. Most companies operating expenses are out of control. Over hired In 2020 and 2021 - inflation and cost of doing business is crushing. Gamers don’t want to spend more on games and the cost to make them is climbing. All of the major developers are seeing their EBIDTA numbers drop which indicates business health.

Can’t keep people around whenever they are working on stuff that won’t make a profit.

A average game has to sell north of 1.5 million copies to break even.

Things are going to get worse.

@ATaco I don’t disagree at all. I hope I’m not coming off as defending corporate interests because I’m not at all. I’m personally pretty high up at a large company so just giving some business insight based on how many companies operate. It’s not good and unfortunately the games industry has become victim to this because people saw money was there.

It sucks…just trying to educate why this is happening right now.

So sad. Of course, I bet the execs will still get their bonuses

@DennisReynolds He was legally required to take a pay cut according to Japanese law

@DennisReynolds In the west, CEOs get a huge bonus when they fire lots of people

@DennisReynolds saving 700 employees would be a massive pay cut, especially if they are US based employees with health care. I'm guessing a good chunk of them are in their company's home state of California so even more expensive for the rent, wages, electricity and other utilities/equipment needed to employ 700 people.

Since the job market fluidity in America works both ways, that CEO or other executive would quickly jump to another high level position with another company/industry before giving up that much money.

Man, nearly 20,000 employees in just 14 months. 😩

This is getting more and more concerning …are we moving away from AAA development for good?

If you look at the profit for all these companies they are making more money now than ever before in their history yet we are seeing more layoffs now more than ever, what's going on here 🤔

@Ajbr8687 Thank you for breaking this down for me.

At this point people wanting to get into game development might as well just study/learn/develop mobile games in python with advertisements thrown in & hope for the best. It seems more viable then working for some of these profit driven companies.

Sorry to hear more bad news. I would usually say I hope the employees can find something else out there in that field, but the way this is going is that even possible?

@SolarSailor @AdamNovice @DennisReynolds

https://www.ign.com/articles/2014/05/13/sonys-ceo-executives-taking-50-pay-cut-losing-bonuses

I'm pretty sure it is not required by law in Japan for the executives and CEO's to have to take a pay cut but they need to prove they have taken measures to avoid mass layoffs and this was simply the option both Iwata & Kaz Hirai chose. If I remember correctly though it actually worked for Sony and they avoided mass layoffs but Nintendo still had to lay people off.

There are a few steps needed before mass layoffs like you said (Maybe 4 or 5), and I'm almost 100% sure that a pay cut is the last option

Man I think making AAA games are starting to not worth it for western country because the cost is too high. It's like gamble everytime developers making AAA games, it's either success and making a lot of money, or fail and losing a lot of money too.

Or maybe western gaming company is just too bloated filled with unnecessary spending and staff.

I guess this is all cause the voracious growth cycle finally hit it's limit and the workers pay the price instead of the top.
What is so terrible about just making a profit eh?

I wonder if they canceled the Ironman and Black Panther games?

I bet those Disney licenses are crazy expensive as well..
All this investment during coivd because so many execs can't see beyond the money right in front of their face as has really come back to bite the normal people in the industry 🤦🤦🤦

Who'd have thought everyone would be back to work and doing their usal stuff after covid and not locked away playing games 🙄🙄

As harsh as it sounds though I imagine alot of companies are seriously looking at replacing as many people with AI as well so this jobs cuts are good excuses for that

So they see the opportunity to have an excuse to make fewer tent pole original titles they know won’t be as profitable as their online crap and they’re taking it.

I'm not sure that EA understand the meaning of innovation. Innovation means new ideas. How does doing what you have already done before by developing games based on existing IPs equate to innovation? Strange that they should use that word of all things...

@wiiware a little of both I’d say. If I were to bet three things are going to happen.

1. More layoffs and exploration of ways to cut costs through AI, asset flips, cutting content and a push back to the office for many dev teams that arnt.

2. More investment on known IP and games that are safe bets. More sequels to popular games, more licensed games and less innovation as publishers dont want to take risk.

3. Rising game prices and more micro transactions filling games to help recoup dev costs.

We are already seeing these trends - but it’ll get worse.

@Tecinthebrain more profit before overhead. They are making more gross profit but their EBITDA numbers are down across the board - which is a better metric for business health and sustainability. Most are essentially down 6-7% year over year.

@TwoDents Yeah I know, it sucks. My kid graduated from an expensive college last year with a BS in Game Design & Development, aka video game making, and this is some really bad timing. And I'm too blame b/c I helped pick the college and the major. 😩

My younger kid is going to the same school but working towards a BS in computer science, so hopefully they can find some type of job. Maybe the AI overlords will need slave labor?🤷‍♂️

@DennisReynolds That man was a genuine legend. He cared about every aspect of gaming, his staff and the players. I don't think we'll ever have another like him.