Having been rumored for a while now, Activision Blizzard carried out its layoff of hundreds of employees on Tuesday, February 12th. According to the companies earnings call, this totaled to around 8% of staff. Last year, the company accounted for 9,600 employees meaning that 8% converts to nearly 800 employees. It has spent Tuesday informing employees of their severance. Affected subsidiaries include Blizzard, King, and Activision.
Despite these layoffs, CEO Bobby Kotick claimed that Activision Blizzard “one again achieved record results in 2018.” However, they are looking to restructure as they didn’t hit their goals for last year. That, and the group had to lower projections for next year. It is now focusing on game development studios and staff working on Diablo, Call of Duty, and other titles.
Interestingly, those let go only seem to come from publishing and esports spaces, reports Kotaku. This, apparently, was planned by Blizzard president J. Allen Brack, according to a note that was sent around to staff:
“Over the last few years, many of our non-development teams expanded to support various needs. Currently, staffing levels on some teams are out of proportion with our current release slate. This means we need to scale down some areas of our organization. I’m sorry to share that we will be parting ways with some of our colleagues in the U.S. today. In our regional offices, we anticipate similar evaluations, subject to local requirements.”
Fortunately for those cut, this document also adds that employees will receive a complex severance package including career coaching, job placement help, health benefits. That, and they’ll receive profit-sharing bonuses from the year beforehand. “There’s no way to make this transition easy for impacted employees, but we are doing what we can to support our colleague,” finishes the Kotaku letter.
Surprisingly, this news comes after Activision Blizzard reports a record-breaking quarter. It seems that the company is focused on restructuring away from trending industry policies and moving more into what they’re known for: making games.
However, this doesn’t make it easier for the workers affected. Kotaku reports that employees were seen standing the parking lot holding each other and crying. A majority of those members had zero understanding as to what would happen leading up to the day.
Pleasing Those In Charge
Blizzard’s stock dropped on Monday when rumors of this situation came about. That said, numbers have been increasing throughout the week thanks to the layoffs. This is a common trend, as investors view restructuring as a favorable move towards the success of the company.
Sales numbers were also revealed for Q3, with Activision Blizzard hitting $2.38 billion in revenue. Projections were $2.24 billion. Overall income hit $1.8 billion over $273 million the company reached in 2017. Also, 2017’s net revenue was $7.02 billion, with 2018’s being $7.5 billion.
According to Variety, Activision Blizzard began its restructuring and changes back in May of 2017. At that time, the company revealed that Destiny 2 would be on Blizzard’s Battle.net platform. This means that the two divisions – Activision and Blizzard – would be directly interacting with each other for the first time. Otherwise, the groups mainly stayed in their own lanes. Later on, Call of Duty: Black Ops 4 was also a Battle.net exclusive. This teased that the two groups were beginning to work as one.
Otherwise, favorite developer Bungie left the company recently. The Destiny developer left with rights to the franchise, leaving Activision Blizzard with only a few IPs.
It seems that Activision Blizzard wants to expand on their current franchises rather than design new ones. As of now, the company is hiring in the games division but claims no new titles are coming this year. Instead, the group will be putting employees into its most popular franchises and bringing them to other platforms, as showcased by the Diablo mobile title announced recently.