Word: As of right now, [EA has announced the $55 billion deal to go private has been agreed upon.] Along with the acquisition, it is a leveraged buyout – EA will tackle an extra $20 billion in debt financing as a part of this deal. This doubtless bodes unwell for EA recreation prospects as they may virtually definitely minimize employees in an effort to decrease prices and assist service that debt, in addition to pursue extra methods to monetize sooner or later. Additionally, in the event you personal any EA inventory, you get a fairly good payday right now.
Right here is my unique put up:
Any acquisition usually means some form of impending layoffs after the deal is settled. The brand new house owners could have new mandates and new targets, which suggests outdated initiatives and outdated mandates will have to be thrown out. There’ll doubtless be some variety of initiatives that don’t align with the brand new mandates, which suggests they’ll be cancelled and the folks engaged on them both shuffled to a brand new mission (if there’s any room for them) or be let go. Bear in mind, initiatives take time to spin up and so they aren’t at all times able to tackle new employees. If a mission isn’t in a state of staffing up already, it’ll be very troublesome to search out room for brand new folks to affix the mission since there received’t be any work for them to do but.
That stated, it’s additionally laborious to say for sure due to the involvement of the Saudi PIF (Public Funding Fund) within the deal, as a result of the Saudis aren’t merely enterprise for enterprise’ sake. They’ve made plenty of unusual selections previously (e.g. what they did with SNK and Metropolis of the Wolves), so they might make comparable bizarre selections that don’t make plenty of sense. I’d put the over/underneath of mass layoffs at 80% inside three months after the deal is legally finalized, with 20% accounting for the Saudi bizarre issue.
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