Electronic Arts has completed its $55 billion buyout by Saudi Arabia’s Public Investment Fund, Jared Kushner‘s Affinity Partners, and Silver Lake. Reports now point to EA layoffs as the newly private publisher moves to cut costs. Bloomberg‘s Jason Schreier reports that EA has told debt investors it plans to cut $700 million in annual costs. That figure includes $170 million tied to what the company calls organizational efficiencies.
The buyout added $20 billion in debt to EA’s balance sheet. About $18 billion of that was expected to be funded at close. Schreier calculates the debt puts EA on the hook for roughly $1.8 billion a year in interest payments. The company’s EBITDA, earnings before interest, taxes, depreciation, and amortization, sits around $1.5 billion. Schreier says that figure should cover the interest but leaves little room for much else. That tight margin is a large part of why EA layoffs are now seen as likely rather than speculative.
Why EA layoffs look likely now
Writing on Bluesky, Schreier laid out the math behind his conclusion. “EA’s annual Ebitda is around $1.5 billion, which should be enough to service the interest payments. But the publisher has told debt investors that it will cut $700 million in annual costs including $170 million in ‘organizational efficiencies,’ per Bloomberg. In other words: mass layoffs.” Neither EA nor its new owners have said publicly which teams or regions the cuts would affect. The company has also not said over what period it expects to hit the $700 million target.
EA’s earlier promises on jobs
When EA’s acquisition plans were first announced last year, the company addressed concerns about layoffs directly. It said there would be “no immediate changes to your job, team, or daily work as a result of this transaction.” The statement did not define how long “immediate” would last. CEO Andrew Wilson said in a statement that EA is “entering this next chapter from a position of strength.” He added that its new partners will help the company “invest boldly, accelerate innovation, and build the next generation of games and experiences.” Employees and studio veterans had already flagged concerns about EA layoffs well before the debt figures became public.
AI’s growing role inside EA
EA’s new investors reportedly hoped AI could help offset the company’s new debt costs. The specifics were unclear when the deal was first announced. In April, Wilson said around 85% of EA’s quality assurance work now uses AI. He added that the company still “hires more QA people than we ever have” to review the AI’s output. Whether that shift feeds into the next round of EA layoffs is unclear. It does show the company already leans on automation to hold down costs ahead of the debt payments coming due. The pattern echoes what happened at Activision Blizzard after Microsoft‘s acquisition closed, when jobs were cut across the combined company as it absorbed the deal’s costs.
EA has not confirmed a specific number or timeline for the layoffs. Its next quarterly filing under private ownership should show whether the EA layoffs reach the $700 million cost target, or whether the company absorbs the cuts through other reductions in spending.