this post was submitted on 08 Feb 2024
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I don't think I've seen a game studio acquisition happen without layoffs of some sort. Doesn't make it right, but it does seem like a horrible routine.
The price tag, followed by a massive round of layoffs is eyebrow-raising.
Stock markets love capex, hates opex.
“Well done, you’ve spent 75 billion to buy market share!!”
“Oh no, you would spend at least 230 million/year for these employees - that just won’t do”.
Nevermind the fact that 1900 roles also buys market share (and you could run 1900 people for 300+ years), but opex is opex and execs are bonused on margins.
And the worst part is they will then brag about how low their opex is to the employees that are still there in the quarterly all-hands, as if it isn't representing how much money they are making but not paying to employees. Well, ok, the worst part is the doing rather than the bragging, but still.
Idk, I'm starting to think that the shamelessness of bragging to your employees that you're fucking them over is worse. At the very least, the employees should feel insulted that they're supposed to be excited about it.
I wonder how many even realize that operating profit even is the money they make after paying every single expense including salaries.
Generally, the ones who understand the numbers are making enough that they don't feel as fucked over. In my experience, anyway
For the unaware:
Capex=capital expenditures. These are the one-time purchases, which grow the business.
Opex=operating expenditures. These are the recurring costs of doing business. Payroll, utility payments, rent for office buildings, etc…
Basically, the stock market loves it when you buy things. Stock owners see it as growing the company, and therefore growing the value of the stock. But they hate operating expenditures, because those make the company seem less valuable; Buying Activision (capex) is great for stock prices, but paying their employees (opex) isn’t.
This is why big corporate acquisitions are usually immediately followed by huge rounds of layoffs for the acquired company. The new company owns the things, but doesn’t want the opex to show up on the next quarterly expense report. So they’ll usually gut the acquired company. Because they’re usually buying other companies for things like copyrights, patents, trade secrets, etc… If they were interested in the employees at the acquired company, they’d be using recruiting tactics and headhunting, instead of simply buying the entire company.
Yeah but 1,900 staff, come the fuck on that’s a mass exodus not a layoff. I’m in a company of 300+ people and it’s a HUGE number of people, I can hardly process over 6x as many layoffs…
Oh absolutely agreed. It just sucks that this isn't unusual, no matter how small or great the number. Hope the peeps get snatched up by better studios
It really depends on if the layoffs were done because they were duplicate people for the same job position, versus clearing house so that the stockholders are happier by having better profits.