Bloodbath Ahead For EA As It Looks To Cut $700 Million In Annual Costs Under Saudi Arabia

Electronic Arts’ $55 billion sale to Saudi Arabia and a consortium of other investors, including Donald Trump’s son-in-law, Jared Kushner, officially wrapped up last night. Now comes the brutal part where the Battlefield and Madden maker restructures to service its enormous new debt load as part of the financial transaction. Bloomberg reports that the publisher is promising debt holders up to $700 million in annual cuts, leading to fears of another major bloodbath in the video game industry.

“The publisher has told debt investors that it will cut $700 million in annual costs including $170 million in ‘organizational efficiencies,'” according to reporting from Bloomberg. “Organizational efficiencies” is code for layoffs, something many at EA have been bracing for ever since the deal was first announced last year.

The publisher currently owns a sprawling portfolio of game studios and franchises, ranging from annual sports blockbusters like EA Sports FC and College Football to The Sims and Battlefield. EA also owns studios like the RPG maker BioWare, currently working on the next Mass Effect after Dragon Age: The Veilguard underperformed, whose output doesn’t generally fit with its live-service blockbuster formula.

Like most big publishers, EA has been consolidating its resources around big bets with minimal risk. Criterion Games, which used to work on the Burnout and Need for Speed racing game franchises, has now been turned exclusively into a Battlefield support studio. “We’re not here to talk about the past,” VP & GM of Battlefield Studios Europe Rebecka Coutaz said on the studio’s 30th anniversary. “We are solely focused on Battlefield.”

EA has also made moves to shift its massive network of support roles, like customer service, to cheaper overseas vendors and, increasingly, AI. The company has been bullish on the technology’s potential to transform its business while claiming generative AI slop won’t make it into its finished products.

While developers at the studio face the prospect of mass layoffs, CEO Andrew Wilson is set for a massive payday. The company’s last SEC filing before going private pointed to a $77 million payout for the last fiscal year, double the number that was previously reported.