- EA is reportedly considering mass layoffs after going private under Saudi Arabia’s Public Investment Fund.
- The company told investors it will cut $700 million in annual costs, including $170 million in organizational efficiencies.
- These annual cost-cutting initiatives suggest mass layoffs, possible acquisition of studios, IPs, and more.
EA was one of the largest independent gaming companies, but now it has gone private under Saudi Arabia’s Public Investment Fund. The company will no longer be trading on the NASDAQ for the first time in over 30 years and will answer to a small private group instead.
The publisher has incurred a heavy debt of $18 billion as part of this acquisition, while the rest of $36 billion is financed in private investment. It has racked up 10x more debt than Ubisoft, so the company is already considering drastic solutions.
A new report reveals that the publisher has informed debt investors that it will implement $700 million of annual cost-cutting measures, including $170 million in ‘organizational efficiencies.’ Therefore, we can expect mass layoffs to begin at the company soon.
Why it matters: EA is already considering drastic measures as it enters a new era after going private. The company could shift its gaming strategy for the worse to satisfy private owners and to pay off debts as soon as possible.
This tidbit comes via reputable insider and reporter Jason Schreier on Bluesky, who reports that EA’s annual EBITDA is around $1.5 billion, which is enough to service the interest payments. However, the company is eager to pay it off as soon as possible via annual cost cuts.
Besides mass layoffs, we can expect EA to start selling off its studios and gaming franchises in the worst-case scenario or begin chasing temporary trends for profits, which would mean a huge loss of creative talent and restrictions in game development in the process.
The company may give up on its struggling and stale franchises entirely, as it focuses on money-making projects, like its various sports franchises.
All stockholders, including many employees, at EA will now receive $210 per share after the company’s privatization. Regardless, gamers are concerned that EA will change for the worse as it aims to satisfy its new owners moving forward.
Do you think EA being private is a good direction for the studio? Let us know your thoughts in the comments below, or join the discussion on the Tech4Gamers forum.
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Shameer Sarfaraz has previously worked for eXputer as a Senior News Writer for several years. Now with Tech4Gamers, he loves to devotedly keep up with the latest gaming and entertainment industries. He has a Bachelor’s Degree in Computer Science and years of experience reporting on games. Besides his passion for breaking news stories, Shahmeer loves spending his leisure time farming away in Stardew Valley. VGC, IGN, GameSpot, Game Rant, TheGamer, GamingBolt, The Verge, NME, Metro, Dot Esports, GameByte, Kotaku Australia, PC Gamer, and more have cited his articles.
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