Irish betting shop giant, Paddy Power, and worldwide betting exchange, Betfair, have announced that in order for their proposes merger to go through they'll cut be cutting jobs. This decision has been made in hopes of saving over £50 million, all while those poor sods that used to work for them having to go down to the job centre. More like Betunfair!
Known for its rather controversial adverts (as well as being pretty big casino), Paddy Power seems to be doing a lot of mergers lately. This is an attempt to turnover a larger profit (mainly in its mobile gaming category). Since they have agreed to merge, these two operators could rise up to rival the Gala/Ladbrokes merge. So we'll have two gambling superpowers to contend with. The newly formed company could be worth as much as £5.8 million. It almost seems to be in response to that deal.
We've already talked about how the Paddy Power Betfair merger could affect the online gambling industry, including how the merge will share skyrocketing. However, we did not discuss how this could lead to job losses as we assumed they would resort to other methods to save money. Gala Ladbrokes haven't fired anyone.
How This Will Affect The Industry
Currently, Paddy Power employs around 5,000 members of staff while Betfair employs over
1,900, totaling at nearly 7,000 people. If they cut the amount they intend to, that could leave them with around less than half of that left. How on earth do they intend to operate? A big company like that needs lots of staffing. They'll be redundancies, yes, but millions of pounds worth seems a little overkill.
Circulations in newspapers speculate that out of this saving of £50 million, half of it contributes to the job cuts meaning £25 million of staffing costs would be slashed. This does put more money in their pocket which they can invest in new ventures, however it does seem ridiculous that two big companies would consider it when both will combine their collective market shares that will make up that amount again in less than a year.