EA’s $55bn sale to Saudi-led group closes — $700 million in cuts on the horizon

Electronic Arts has told debt investors it plans to cut $700 million in annual costs, including $170 million tied to “organizational efficiencies,” as the company completes its $55 billion sale to a Saudi-led group. Bloomberg journalist Jason Schreier, citing the company’s disclosures, interpreted that phrase bluntly in a Bluesky post: “In other words: mass layoffs.”

The sale, finalized on Aug. 4, hands control of the gaming giant to a group led by Saudi Arabia’s Public Investment Fund (PIF) and the investment firm Affinity Partners, led by Jared Kushner, son-in-law of President Donald Trump. Per the BBC, not only does the deal end EA’s 36-year run as a publicly-traded company, but it also ranks as the largest leveraged buyout in history.

Under the deal’s terms, all EA stockholders, including many employees, will be paid $210 per share, Schreier wrote. To close the transaction, PIF borrowed $20 billion from JPMorgan on top of the $36 billion it had already committed, with EA itself taking on the resulting debt, according to the BBC. Schreier put the total debt load at $18 billion, which he estimated would cost the company roughly $1.8 billion a year in interest.

He noted EA’s annual earnings before interest, taxes, depreciation, and amortization sit around $1.5 billion — enough, he said, to cover the interest payments, though the planned cost cuts suggest the company is looking to build in a further cushion.

The BBC reported similar concerns from industry watchers about what the debt load could mean for the company. Schreier told the outlet the pressure could lead to “mass layoffs, more aggressive monetization, and other big cost-cutting measures.” In that same BBC report, Christopher Dring, editor-in-chief of the Game Business, said the buyout structure pointed toward “a very hands-on approach from the investment group,” adding that private equity firms tend to be aggressive managers.

Some in the industry also raised questions about the deal’s effect on EA’s creative direction. Shams Jorjani, chief executive of Arrowhead Game Studios, told the BBC he was hopeful the new ownership wouldn’t push EA toward “more sequels, more mega-franchises” at the expense of its broader catalog.

The sale has also drawn scrutiny over Saudi Arabia’s human rights record. Consensual same-sex conduct can be punished by death or flogging under interpretations of Sharia law in the kingdom, prompting concern among fans of EA titles like The Sims, which features LGBT+ relationships.

The advocacy group Players Alliance HQ has urged gamers to petition politicians over the deal, warning on its website that PIF’s majority ownership could lead to themes around “free speech, gender,” and other issues being “reduced or fully censored.” PIF is controlled by Crown Prince Mohammed bin Salman, whose government has been held responsible by several human rights organizations and news outlets for the killing of journalist Jamal Khashoggi.

At the deal’s initial announcement, EA chief executive Andrew Wilson, who is staying on, said the company intended to “create transformative experiences to inspire generations to come.”