EA lays off staff before $55B Saudi deal, burdened by $20B debt

EA is laying off staff before it closes its $55 billion sale to Saudi Arabia's public investment fund, with the fund set to hold a 93.4% stake when the transaction is complete. According to Kotaku, the layoffs will hit teams including recruitment, customer support, trust and safety, and IT, and they are happening now, not after the acquisition.

This timing matters because EA is not just moving money around. The report frames the cut as part of a grim industry summer that is already in motion, with Microsoft reportedly eyeing studios to shutter, and the CEO of Epic Games describing a “tidal wave” over the AAA business. Within that environment, EA's decision to trim headcount ahead of the Saudi deal suggests the company is trying to stabilize operations while carrying a heavy capital burden: it has taken on $20 billion in loan debt to close the transaction.

Kotaku reports it spoke with sources inside EA and shared an email sent to EA's customer support team. In that email, EA says it is axing roles to “adapt how we work to better meet fans’ changing needs.” It adds that EA is making or proposing changes to some roles, creating new roles, and moving certain work to different teams, locations, or service partners. Translation: even when companies use customer-centered language, organizational reshuffling is often the mechanism that follows financial pressure and deal readiness.

Layoffs after major acquisitions are not unusual. The source points to Microsoft, which laid off 1,900 people after purchasing Activision Blizzard for $68.7 billion. The distinction here is the sequencing. EA's trimming is reportedly occurring before the acquisition closes, which is more consistent with a balance sheet that needs near-term relief rather than post-close integration plans.

And EA does have a balance sheet story. The deal with the Saudi investment fund was also reported to be tightening its purse strings late last year. That macro backdrop helps explain why companies might act early. EA's $20 billion in loan debt raises the stakes: debt service and deal risk can make “we will wait until after closing” a luxury a highly leveraged acquirer does not always have.

If this sounds familiar, it is. The report says the layoffs are a continuation of last year's rash of layoffs at EA, including January job cuts that laid off BioWare veterans and effectively shut down Dragon Age, plus April layoffs that hit hundreds of employees and cancelled two projects, and May actions that included cancelling the Black Panther game and closing the studio producing it. The pattern is clear: even as EA remains one of the big publishers in AAA and broader live-game ecosystems, cost control is arriving in waves, not as one clean event.

The Saudi angle adds another layer of reputational and stakeholder risk. Individual EA games are seeing withdrawals of public support related to the deal, including The Sims, despite the development team’s promises that nothing will change. Beyond consumer backlash, the incoming transaction has concerned observers who believe the public investment fund is engaged in “sportswashing” amid the country’s documented human rights violations. EA is also reassuring its staff that its values will “remain unchanged,” even as critics point to poor treatment of women and sexual minorities and documented crackdowns on political dissent.

For executives and board members, the operational implication is blunt: when a large acquisition is financed with significant debt, workforce decisions can happen under two overlapping clocks. One clock is financial, measured in cash flow needs and integration timelines. The other clock is political and reputational, measured in whether employees, customers, and partners believe the post-deal narrative matches real-world outcomes. In the background, the industry context is not easing. Microsoft’s potential studio shuttering and Epic’s warnings about a AAA “tidal wave” suggest the broader market is still consolidating, which can turn internal restructuring into a competitive requirement, not just a corporate choice.

EA’s CEO also appears in the report through a detail about compensation: he took in 260 times the median salary of the company. Whether or not readers focus on the optics, the second-order effect for governance is straightforward: when layoffs coincide with a deal of this size, every stakeholder will watch the alignment between pay, promises, and execution. For boards considering similar transactions, the lesson is not that acquisitions cause layoffs. It is that debt-financed timing, combined with high-scrutiny counterparties and continuing industry contraction, can make workforce reductions arrive earlier than integration press releases would suggest.