EA Just Laid Off 5% Of Its Workforce Or ~670 People

Earlier this week EA announced that it was sunsetting two mobile games and that it was cutting "small number" of staff attached to it mobile divisions, in particular those connected to its mobile racing games. That seems to have been a portent of what was to come as the company today announced it would be unilaterally shedding over six hundred staff, or about 5% of its total workforce. EA's CEO, Andrew Wilson, stated that the part of their logic with these cuts, as well as the amount, stems from the company "moving away from development of future licensed IP that we do not believe will be successful in our changing industry." IGN reports that EA Sports, Apex Legends, Star Wars: Jedi, Iron Man, Black Panther, Battlefield, Need for Speed, Dragon Age, Skate, and The Sims will be the properties that EA emphasizes moving forward.

This has resulted in EA confirming that it was cancelling several projects that were in development. As part of that, there are several sources confirming that Respawn's unannounced Star Wars first-person shooter is dead. Ridgeline Games, the studio currently assigned to make story campaigns for the Battlefield franchise, is being shut down entirely. Criterion Games, led by Danny Isaac and Darren White, will now be in charge of Battlefield's single-player campaigns, though that leaves the Need for Speed franchise without a studio.

Projects that seem to be confirmed as being "safe" are a new Star Wars Jedi Game, Black Panther and Iron Man. Also, BioWare, which faced major layoffs in 2023 seems to have been spared with CEO Andrew Wilson confirming the studio is still moving forward with Dragon Age: Dreadwolf followed by a new Mass Effect. That was slightly surprising, but maybe Dreadwolf has a bit of the sunk cost fallacy for them. I just have a hard time seeing how a company whose last project was Anthem would survive layoffs.

CEO Andrew Wilson's total compensation during the 2023 fiscal year was $20,659,002.

Holy shit, that last line. Unreal.

Boy... I figured maintaining an android would be expensive, but $21 million a year seems high. Might be cheaper to just replace him with a human. Or maybe not actually.

I forget who reported this, but apparently at the price of the stock buyback that EA did recently, they could have kept everyone they laid off this week around for another 5 years. How are you supposed to interpret these layoffs besides c-suite looting of companies that exist to create products? The people at the top don't make shit, but the corporate world in 2024 only cares about quarterly reports and "the brand". Tanking EA just accelerates the rate at which they can loot the company and get their precious golden parachute.

Sorry to keep hammering this point but it's never been more clear that these layoffs only happen to artificially juice top-level numbers. Meanwhile, the people who make games suffer, the people who want to make games hit a hiring blockade, and we all get worse games as a result. All to justify some dipshit's bloated compensation.

I'll preface this by stating that lay-offs suck and our economy is an absolute mess. I do this for a living, so I pulled up their most recent SEC filings to see how much different they are from other public registrants. Many of you probably know this information well, but for kicks here is a breakdown of what I found.

Is it a lot of money, yes... but take a read through their Proxy (first link below), including the required pay vs performance disclosure. His base compensation is $1.3M with a maximum bonus of 200% of that base salary for FY23. The Board approved a 115% payout of that bonus for FY23. Under $5M, his cash compensation is not all that crazy for a public company with a market cap of $30B+. If you look at their most recent quarterly report (second link) and the Proxy, you can calculate that all C-suite compensation (around $9M) is less than 0.5% (0.25% was my approximation) of annualized operating expenses (also pulling out certain non-cash US GAAP expenses like amortization and impairment). That is not wildly off for public companies.

His compensation jumps to $20M when you factor in share based compensation (non-cash initially). To an extent stock awards are smoke and mirrors that just make C-suite compensation look massive (primarily for competitive reasons). Yes, someday he may realize that value (or more) but it is locked up under vesting provisions and requirements that he hold a target % of the Company's equity. If he runs the Company into the ground he will see none of that equity value... if you spend some time on EDGAR you can see all the 'insider' trading of the named officers and directors (Form 4) if you want to see actual sales, etc.

What I find more interesting in my research is that they are 9% owned by Saudi Arabia's public investment fund (also owns LIV golf and a number of sport franchises). Probably yesterday's news.

https://s22.q4cdn.com/894350492/files/doc_financials/2023/ar/418941-1-_8_Electronic-Arts-Inc-Proxy10-K-Combo_clean.pdf

https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/0000712515/000071251524000007/ea-20231231.htm

Is it an insane amount of money, sure... but it's no different than any other public registrant and primarily tied into the same equity values that are fueling America's pensions, 401(k)s and all of our insurance.

@skuski: While I appreciate the work you did finding all of this, I don't think anyone's issue was that he might be compensated more than his peers. The issue is that he makes THIS much money to lead EA to a point where hundreds lose their jobs and exciting games are cancelled. If you want to interpret that as criticism of the job itself and the ludicrous market for its compensation, that matches my thoughts (and probably those of other posters).

Sure, I get that… unfortunately it’s not just a games industry or even tech industry problem right now, it’s an all industries problem, which absolutely sucks. There was significant over-hiring and consolidation over the past couple years (pretty much globally), and now the economy is un-gracefully attempting to reset itself in the so called “soft-landing”… Adding to the confusion of it all, equity markets keep going up, as there is so much excess capital to invest in the public markets. It’s beyond wild.

I want developers to have job security and fair pay, so that they can make great games. All these lay-off situations are terrible, but I hope this doesn’t dissuade companies from aggressive hiring in the future because some of the bets will pay-off. Hope my post didn’t come off otherwise.