It's looking like another grim summer for the videogame industry, with more bad news on the horizon. Microsoft is reportedly considering closing several studios, while Epic Games' CEO has warned of a "tidal wave" impacting the AAA gaming sector. Now, EA is joining the list of companies facing difficult decisions, with reports of upcoming layoffs as it prepares for a $55 billion sale to Saudi Arabia's Public Investment Fund (PIF). The deal will give the PIF a staggering 93.4% stake in the company, according to sources.
Kotaku has reported that EA is cutting an unknown number of roles across several departments, including recruitment, customer support, trust and safety, and IT. The report cites internal emails sent to EA's customer support team and claims that the publisher has spoken with sources inside the company. EA has stated that these changes are part of an effort to "adapt how we work to better meet fans’ changing needs," adding that the company will be "creating new roles, and moving certain work to different teams, locations, or service partners." However, this explanation has been met with skepticism, as similar language has been used by companies in the past to mask large-scale layoffs.
This is not the first time EA has faced significant restructuring. Last year saw a wave of job losses, including the layoff of BioWare veterans and the shut down of the Dragon Age franchise. In April, hundreds of employees were let go, and two projects were scrapped. In May, the Black Panther game was cancelled, and the studio responsible for it was closed. These cuts come at a time when EA is facing $20 billion in debt, which it took on to facilitate the sale to the PIF.
The timing of these layoffs is notable, as they are occurring before the acquisition is finalized. This suggests that EA is trying to reduce costs ahead of the sale, rather than after. Similar moves have been seen in other major gaming industry deals—such as Microsoft’s $68.7 billion purchase of Activision Blizzard, which was followed by the layoff of 1,900 employees. The Saudi Arabia PIF has also been under scrutiny for its financial practices, with reports of tightening its purse strings in late 2023.
Despite the concerns, EA's leadership has emphasized that the company's values will remain unchanged. This assurance comes despite Saudi Arabia’s poor human rights record, including its treatment of women and sexual minorities, as well as its crackdowns on political dissent. The move has also sparked backlash from fans and developers, with The Sims being one of the most vocal critics. Despite assurances from the development team that the deal would not affect the game, public support has waned.
While EA continues to push forward with its sale, the gaming industry faces an uncertain future. With rising debt, shifting market demands, and geopolitical concerns, the grim summer may only be the beginning of a challenging period for the sector. As the sale moves closer, more layoffs and changes are likely to follow, further reshaping the landscape of AAA gaming.
