A double-take on Take-Two's layoffs | This Week in Business

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This Week in Business is our weekly recap column, a collection of stats and quotes from recent stories presented with a dash of opinion (sometimes more than a dash) and intended to shed light on various trends. Check every Friday for a new entry.

Take-Two joined the parade of publishers with a round of triple-digit layoffs this week, announcing plans to cut headcount by approximately 5%.

It's awful, as all such layoffs are. And it reflects poorly on the management who did not run the business in a way that wouldn't lead to hundreds of employees' lives being upended, as all such layoffs do.

That this belt-tightening comes less than three weeks after Take-Two decided it could afford $460 million to acquire Borderlands developer Gearbox makes it look that much worse.

Looking at the layoffs all on their own, it's not difficult to see what Take-Two is thinking. On top of the general "economic headwinds" that even the most profitable companies in the industry have been using as a reason to cut staff, Take-Two specifically hasn't been profitable of late. The company has reported seven straight quarters of net losses and its forecast says it will be eight-in-a-row once it reports its earnings next month.

So why is it splurging for Gearbox now, when it's had a rough stretch and isn't expecting the long-awaited Grand Theft Auto 6 to come and save the day until next year at the earliest?

Well, the Gearbox acquisition looks opportunistic to me, a chance for the publisher to get a deal on a valued asset. Embracer's struggles have been well-documented, and it could kindly be described as a motivated seller here. Gearbox is also uniquely valuable to Take-Two, which already had the publishing rights to Borderlands but now owns the IP outright and has control of the franchise's success going forward.

That's the sort of deal I would expect Take-Two to pursue almost regardless of its current financial