Layoffs have already hit this and other industries, including Microsoft, regardless of buyouts, and since this deal is fresh, it will likely happen again in the near future. But there's no need for them to squeeze value out of what they bought. They can revive dormant IPs just by making sure they run on modern platforms and putting them on Game Pass. That alone is a tremendous amount of value that Activision couldn't get regardless of how much they squeezed.
And a lot of people who leave or are let go in these situations go on to form new studios. If you think about it too, it doesn't make much sense that the jobs would disappear. The industry will support a certain number of games being produced, and someone's got to make them still.
A worse outcome to me still seems to me to be a world where Sony is uncontested in its console space.