EA already looking at layoffs worth £125,000,000 after Saudi Arabia buyout

Electronic Arts has completed its $55 billion acquisition to a group of private investors, as debt from the deal threatens to overwhelm the company.

After the buyout was announced in September, EA has officially completed its $55 billion (£40.9 billion) acquisition to an investor consortium, making them a private company rather than one that’s on a stock exchange.

The game publisher, known for titles like EA Sports FC and Battlefield, is now owned by Saudi Arabia’s Public Investment Fund (PIF), Silver Lake and Affinity Partners. The latter is a US-based investment firm founded by Donald Trump’s son-in-law, Jared Kushner. 

According to a filing with Brazil’s antitrust regulator (via The Wall Street Journal), the PIF owns 93.4% of EA following the deal, while Silver Lake and Affinity own 5.5% and 1.1%, respectively. 

In a statement confirming the deal, EA CEO Andrew Wilson said: ‘This moment recognises the extraordinary people whose creativity, ambition and passion have made EA one of the world’s leading interactive entertainment companies. 

‘We’re entering this next chapter from a position of strength with partners who share our vision and ambition. Together, we’ll invest boldly, accelerate innovation, and build the next generation of games and experiences for the hundreds of millions of players and fans who inspire us every day.’

This deal means EA will now go private after 36 years as a publicly traded company. More importantly, Saudi Arabia’s PIF has borrowed $20 billion (£14.8 billion) to close the deal, with the business taking on the debt. 

With $20 billion in debt hanging over the company, there’s concern around how EA will pay it back. As noted by Bloomberg’s Jason Schreier when the acquisition was proposed, it could lead to ‘mass layoffs, more aggressive monetisation, and other big cost-cutting measures’.

Mere hours after the deal was confirmed, a new post on Bluesky revealed that EA has told investors that it will be cutting $700 million in annual costs, including $170 million in ‘organisational efficiencies’. Or in Schreier’s own words: ‘mass layoffs’.

Layoffs and increased microtransactions have always been inevitable (there have already been three rounds of layoffs at EA this year), but this debt will almost certainly lead EA to focus on its biggest franchises, at the expense of smaller games. EA is known for its annual sport titles and Battlefield, but the publisher has also partnered with smaller studios in the past for its EA Originals label, which led to titles like Unravel and It Takes Two. 

Another concern is how involved the PIF, the largest stakeholder, will be in the publisher’s games moving forward. The fund is controlled by Saudi Arabia’s prince Mohammed bin Salman, whose government has been accused of numerous human rights violations. 

In a country where LGBTQ+ people are discriminated against, there’s concern that the PIF’s ownership could censor titles like The Sims, which champion inclusivity. 

It’s worth noting that the PIF was already an investor in EA, albeit as a minority stakeholder with 9.9%. Now, it owns the majority of the company. 

The deal represents Saudi Arabia’s growing investment into the gaming space. The country bought Pokémon Go developer Niantic for $3.5b billion (£2.7 billion) last year, and also hosted the Esports World Cup.

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