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EA will spend over $125 million laying off 5 percent of its workforce (www.gamedeveloper.com)

submitted 6 months ago by [email protected] to c/[email protected]

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[–] [email protected] 13 points 6 months ago (4 children)

"These charges consist of approximately $50 million to $65 million associated with office space reductions, approximately $40 million to $55 million related to employee severance and employee-related costs, and $35 million to $45 million in costs associated with licensor commitments," reads the filing.

The severance I get, but why is closing offices costing them so much. And what are “ licensor commitments?”

[–] [email protected] 30 points 6 months ago (1 children)

cause commercial rental is a commitment, if you can't find another company to take over your lease, chances are you have to pay the majority of left over amount + penalty + restoration. Licensor commitments are similar but probably on tech/software licensing, ie. server rentals, Maya/Speedtree licensing agreement for the site, whatever cloud service they use for backup and share stuff, etc. Those at bigger scale aren't paid year to year like your regular indie studio just subscribe to Adobe/Autodesk for app uses per seat.

[–] [email protected] 1 points 6 months ago

Probably all the hardware and shit they have at those offices, too. Likely all leased.

[–] [email protected] 14 points 6 months ago (1 children)

Maybe getting out of fixed leases?

[–] [email protected] 3 points 6 months ago

Yeah, that would make sense. Commercial leases can be up to a decade long.

[–] FlorianSimon 3 points 6 months ago (1 children)

Maybe because they're selling property at a loss? I don't actually know, just guessing

[–] [email protected] 6 points 6 months ago* (last edited 6 months ago) (1 children)

Yeah, that could be. No one wants office buildings because so many people are remote now. Office buildings are the cheapest they’ve been in decades.

[–] [email protected] 4 points 6 months ago

Good, use them for something worthwhile.

It is dystopian really the nature of shuffling hundreds or thousands of people to a building, into a cubicle, in front of a computer for 8 hours a day.

[–] [email protected] 2 points 6 months ago* (last edited 6 months ago)

Every big UK company I have worked for doesn't own its building. They will typically agree to rent a building for 5-20 years at a fixed rate (longer times if its being purpose built for them) .

So I would expect this is paying out the rest of the rental agreements for a building to escape the building lease.

It is to do with financial reporting and the way asset and operational costs are reported.