Although the industry generally expects multiple rounds of layoffs to come, Electronic Arts (EA) seems to have taken the lead in starting the layoff process. According to industry analyst Destin Legari, EA's first round of layoffs may be relatively small, but more layoffs will follow.
Legari posted on social media that EA is currently informing affected employees of the layoffs. It is unclear the exact scale of the layoffs, but he cited sources as saying that multiple departments of the company will be affected by the layoffs.
He wrote: "Unfortunately, I learned from reliable sources that EA has started layoffs, but the scale of the first round may be relatively limited. Relevant employees are receiving resignation notices one after another. As far as I understand, layoffs will affect multiple business sectors of the company."
Previous reports stated that after Microsoft’s fiscal year ends on June 30, layoffs will mainly be concentrated in Xbox studios, but there are also views that layoffs and studio closures will spread across the entire gaming industry. For example, French journalist Sylvain Trinel said that Microsoft's layoffs are "just the beginning of a large-scale industry shock."
Trinell said that in addition to Xbox-owned studios such as Bethesda, studios owned by third-party publishers such as DON'T NOD and Quantic Dream are also at risk of layoffs or even closure. He wrote: "The news I received tonight is not optimistic, and this is really just the beginning."
EA's layoffs are actually not surprising. An investment consortium composed of the Saudi Public Investment Fund, Affinity Partners and Silver Lake Partners is advancing the acquisition of EA. In this context, EA is likely to streamline its structure and improve operational efficiency through layoffs. The acquisition was approved by shareholders in December last year and is currently awaiting regulatory approval. The transaction, valued at US$55 billion, was completed using a structured transaction model, which will allow EA itself to assume a considerable amount of debt.
As soon as the acquisition news was announced, BioWare developers were already worried about possible layoffs. Some employees said they were already preparing for the worst and continuing to update their personal portfolios. A developer said: "I have been preparing since last year. I have been compiling my portfolio and paying attention to other job opportunities. I feel like it is only a matter of time before layoffs."
As for Microsoft, there are reports that the company has also initiated layoffs. George Broussard, co-founder of the original 3D Realms and Apogee, revealed that within Bethesda, employees who are not involved in new projects such as "Fallout" or "The Elder Scrolls" are basically at risk of layoffs.
He wrote: "There is news that ZeniMax has begun to lay off employees. There are also recent rumors that the intensity of layoffs may be far greater than outside expectations. Everyone, please be prepared."
However, similar to EA's situation, Microsoft is most likely just starting to notify employees, and formal layoffs are not expected to take place until the end of the fiscal year.