Saudi-acquired EA is reportedly planning to make massive cuts after taking $18 billion of debt, and we all know what that means

Electronic Arts, now under the ownership of Saudi Arabia's Public Investment Fund along with firms Silver Lake and Affinity Partners, is reportedly set to undergo massive job cuts following the acquisition. According to Bloomberg's Jason Schreier, this will include a $700 million annual cost reduction, which is expected to involve significant layoffs.

The acquisition has resulted in EA taking on $18 billion in debt, with interest payments estimated at $1.8 billion per year. While EA's annual EBITDA is around $1.5 billion, this should theoretically be sufficient to cover the interest payments. However, the publisher has indicated a need for substantial cost cuts. The news of the acquisition comes amid a trend of large-scale acquisitions leading to layoffs and studio closures, as seen with Microsoft's purchase of Blizzard.

With the broader gaming industry already worth over $200 billion globally, the question remains as to why the benefits are not trickling down to the people creating the games.