Electronic Arts has officially transitioned to private ownership, with the Saudi Arabia Public Investment Fund, along with firms Silver Lake and Affinity Partners, now at the helm. This change, confirmed by Bloomberg's Jason Schreier, is reportedly set to usher in substantial layoffs.
EA will no longer be traded on the NASDAQ, a change marking its first time off the public market in 36 years. Stockholders are expected to receive $210 per share. A significant aspect of this acquisition is EA's assumption of $18 billion in debt, necessitating approximately $1.8 billion in annual interest payments.
While EA's reported annual earnings before interest, taxes, depreciation, and amortization (EBITDA) stands around $1.5 billion, which should cover interest, the publisher has informed debt investors of plans to cut $700 million in annual costs. A significant portion of this reduction, $170 million, is earmarked for "organizational efficiencies," a common euphemism for workforce reductions.
This situation echoes a broader trend within the gaming industry. Large-scale acquisitions have frequently led to mass layoffs and studio closures. Notably, Microsoft's acquisition of Activision Blizzard resulted in the dismissal of 1,900 employees. More recently, Microsoft's internal restructuring led to 1,600 layoffs, with further reductions anticipated by 2027. Ubisoft has also undergone significant cuts, and EA itself had conducted layoffs prior to this acquisition.
The influx of talent into the job market from these layoffs, combined with anticipated reductions at EA, paints a challenging picture for industry professionals. This occurs even as the global games industry continues to achieve record profitability, with revenues surpassing $200 billion in 2025. The distribution of this revenue, particularly in relation to employee compensation and job security, remains a point of concern.