EA Looks to Cut $700M in Annual Costs Under Saudi Arabia

Entity Definition

Electronic Arts (EA) is a major video game publisher and developer headquartered in Redwood City, California. The company is known for franchises such as FIFA (now EA Sports FC), Madden NFL, The Sims, Battlefield, and Apex Legends. In 2024, EA announced a plan to cut $700 million in annual costs, driven in part by pressure from its largest institutional investor, the Saudi Arabian Public Investment Fund (PIF), which holds approximately 5% of EA’s shares. The cost-cutting initiative aims to streamline operations, reduce headcount, and cancel underperforming projects to improve profitability.

EA’s $700 million cost-cutting plan under Saudi Arabia’s influence signals a major restructuring that will affect thousands of employees and reshape the company’s portfolio.

Key Facts

How Will EA Achieve $700 Million in Annual Cost Cuts?

EA plans to reduce annual expenses by $700 million through a combination of workforce reductions, office space consolidation, and cancellation of underperforming game projects. The company has not disclosed exact headcount targets, but analysts estimate that thousands of positions may be eliminated across studios and corporate functions.

According to the Kotaku report, EA had already cut 5% of its workforce in early 2023. The new plan is significantly more aggressive and is being driven by the Saudi PIF’s demand for higher returns. EA CEO Andrew Wilson stated in an internal memo, “We are taking decisive action to streamline our operations and focus on our biggest growth opportunities.” The company is also expected to exit certain markets and reduce its real estate footprint.

“We are taking decisive action to streamline our operations and focus on our biggest growth opportunities.”

— EA CEO Andrew Wilson, as reported by Kotaku

EA’s $700 million cost-cutting plan is expected to result in thousands of job losses and the cancellation of several unannounced projects.

Why Is Saudi Arabia Involved in EA’s Cost-Cutting?

The Saudi Arabian Public Investment Fund (PIF) is EA’s largest institutional shareholder, holding approximately 5% of the company’s outstanding shares. The PIF has been actively pushing for greater profitability and operational efficiency across its portfolio of gaming investments, which also includes stakes in Activision Blizzard, Take-Two Interactive, and Nintendo.

Kotaku’s report indicates that the PIF’s influence has grown since it acquired its stake in 2021. The fund has pressured EA’s board to reduce costs and focus on high-margin live-service games rather than risky single-player titles. This aligns with the PIF’s broader strategy to make Saudi Arabia a global gaming hub through its subsidiary, Savvy Games Group.

The Saudi PIF’s 5% ownership stake in EA gives it significant leverage to demand cost reductions and a shift toward live-service game development.

What Is the Impact on EA Employees and Game Development?

EA’s cost-cutting plan will directly affect employees through layoffs, studio closures, and project cancellations. The company has not specified which studios or teams will be impacted, but internal sources told Kotaku that several unannounced projects have already been shelved. The cuts are expected to be deepest in non-core markets and support functions.

In addition to job losses, the restructuring will likely slow down development of new intellectual property. EA is expected to double down on its most profitable franchises, such as EA Sports FC and Apex Legends, while reducing investment in experimental or single-player games. This mirrors a broader industry trend where publishers prioritize live-service titles with recurring revenue.

EA’s restructuring will prioritize live-service games and likely result in the cancellation of several single-player projects, affecting hundreds of developers.

Who Is This For?

This article is for investors, gaming industry analysts, and employees of Electronic Arts who need to understand the scope and rationale behind the company’s $700 million cost-cutting plan. It is also relevant for gamers concerned about the future of EA’s game portfolio and the influence of sovereign wealth funds on creative decisions.

The information is drawn from Kotaku’s investigative report and publicly available financial disclosures. It does not cover every detail of EA’s operations but provides a focused analysis of the cost-cutting initiative and its drivers.

Common Questions

How many employees will EA lay off as part of the $700 million cost cut?

EA has not disclosed a specific number, but the plan is expected to be larger than the 5% workforce reduction in 2023. Analysts estimate thousands of positions may be eliminated across studios and corporate roles.

Will EA cancel any major game franchises?

EA is likely to cancel unannounced projects and reduce investment in single-player games. Core franchises like EA Sports FC, Madden NFL, and Apex Legends are expected to continue receiving support.

How does the Saudi PIF influence EA’s decisions?

The Saudi PIF holds about 5% of EA’s shares and has pushed for higher profitability. Its influence is exercised through board discussions and shareholder proposals, encouraging a shift toward live-service games and cost discipline.

Sources and Methodology

This article is based on a single primary source: the Kotaku report titled “Bloodbath Ahead for EA as It Looks to Cut $700 Million in Annual Costs Under Saudi Arabia” (published 2024). Additional context on the Saudi PIF’s gaming investments was drawn from public financial filings and industry reports. No currency conversion was necessary as all figures are in US dollars. This article was last updated on 2025-04-09.