Four days after the $55bn Saudi-led buyout closed, EA has told its new lenders it plans to cut $700 million in annual costs. Bloomberg’s Jason Schreier, who has tracked the deal from start to finish, read the disclosure with little patience:
“In other words: mass layoffs.”
Of the $700m, $170m is described in the company’s presentation to debt investors as “organizational efficiencies” — the phrase GamesRadar and others have flagged as corporate shorthand for headcount. The plan was presented days after the takeover completed on August 4.
What the buyout left behind
The deal ended EA’s 36-year run as a public company and is the largest leveraged buyout in history. Control passed to a group led by Saudi Arabia’s Public Investment Fund, with Affinity Partners, the firm run by Jared Kushner, alongside. Shareholders were paid $210 per share.
Financing it took borrowing on a scale that now shapes the company’s budget. The PIF borrowed $20bn from JPMorgan on top of the $36bn it had already committed, and EA itself took on the resulting debt. Schreier put the total load at around $18bn, costing roughly $1.8bn a year in interest against annual earnings of about $1.5bn. The $700m in cuts is the cushion for that gap.
What the cuts mean for players
Schreier told the BBC the pressure could lead to “mass layoffs, more aggressive monetization, and other big cost-cutting measures.” Christopher Dring, editor-in-chief of The Game Business, said the buyout structure pointed to “a very hands-on approach from the investment group” — private equity, he noted, tends to manage aggressively. Shams Jorjani, chief executive of Arrowhead Game Studios, said he hoped the new owners would not push EA toward “more sequels, more mega-franchises” at the expense of its wider catalogue. Andrew Wilson stays on as chief executive.
This is the first concrete move from the Saudi sovereign fund’s takeover, and the region is watching it closely. Layoffs are not new territory for the publisher: EA cut staff in June ahead of the deal closing, and Battlefield studios were hit after the series’ biggest launch. For players here, the practical risk sits in live-service titles: FC, Battlefield and Apex Legends are where “more aggressive monetization” lands first.
Why is EA cutting $700 million in costs?
The buyout left EA with roughly $18bn in debt, costing about $1.8bn a year in interest against annual earnings of about $1.5bn. The cuts build a cushion against that gap.
Will EA lay off staff?
Not confirmed. Bloomberg’s Jason Schreier reads the $170m “organizational efficiencies” line as mass layoffs; EA has not detailed what the cuts will touch.
Who owns EA now?
A group led by Saudi Arabia’s Public Investment Fund, with Affinity Partners, the firm run by Jared Kushner, alongside. The $55bn deal closed on August 4 and is the largest leveraged buyout in history.
Which EA games could be affected?
Nothing has been announced. Schreier has said the debt pressure could mean more aggressive monetization in live-service titles such as FC, Battlefield and Apex Legends.
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