Activision Blizzard has completed its fourth-quarter earnings call earlier today.
Reflecting on a tumultuous 2018 and facing an uncertain future in 2019, Activision Blizzard has completed its fourth-quarter earnings call. While we were uncertain before who (or how many) people would be laid off before the call, reports came in that employees were hugging each other and crying in the parking lot. The company announced it will be cutting 8% of its global staff today.
“Our restructuring plan sheds investment and less productive nonstrategic areas to our business and will result in a net headcount reduction of approximately 8 percent while also driving a significant increase in investment focus and capabilities around our biggest franchises,” said CEO Bobby Kotick. “We’re confident that over time this plan will enable our teams to accelerate the delivery of high-quality content to our communities.”
There are some winners and losers among the company’s intellectual properties.
Kotick also indicated that increased investment would go into franchises such as Diablo, Call of Duty and World of Warcraft. The company is responding to pressure from free-to-play games such as Fortnite. Another rising star in the battle royale genre, Apex Legends, could be a potential threat to the company as well.
“Our 2019 outlook assumes that we will not improve in-game monetization as quickly as we would like and that it is a transition year where we have less new major content to release than we should,” Kotick said during the earnings call. “In-game execution was inadequate in some of our franchises, and we saw weaker-than-anticipated retail demand.”
Activision Blizzard is not the only gaming company to stumble in 2018.
EA and Take-Two Interactive also reported losses of 13 percent and 14 percent respectively in their share prices last week. However, the reports of Activision Blizzard losing key executives such as Blizzard co-founder and president Mike Morhaime among others hit the company hard. Those losses rocked the confidence of investors and fans alike in the company.
Once again, our thoughts and prayers are with the affected employees. We wish them the best in their future endeavors and hope they find employment soon.
UPDATE: One of the most high-profile layoffs is long-time Community Manager Caden “Ythisens” House. He was one of the most active and high-profile Community Managers on the World of Warcraft forums.
As of today I’m no longer an employee of @Blizzard_Ent. Wasn’t my choice. I wanted to retire here. I was just laid off from my dream job.
Probably not best for me to tweet right now but it was an honor being your CM @Warcraft community. I love all of you.
— Caden of the House House, First of his Name (@CadenHouse) February 12, 2019
Blizzard President J. Allen Brack has taken notice of the situation developing at the company.
UPDATE 2: Blizzard President J. Allen Brack has released a statement on these events.
Over the past few months, I’ve met with many people throughout Blizzard, talking about how we create our future. One thing that remains constant: we are committed to creating epic games and entertainment experiences.
Our development pipeline is strong, and we have the largest lineup of games that we’ve ever had. At the same time, Blizzard tries to have a level of craftsmanship and excellence in all that we do. Maintaining those standards as we continue expanding these worlds takes both time and talented developers.
With that in mind, we have plans to add to game development. We are dedicated to bringing you more content across existing game franchises and bringing our unannounced projects to life. Esports and the Overwatch League are also important priorities, and we will continue to produce great competitive content.
Brack noted that these were difficult decisions to make.
To better support these priorities, we need to reorganize some of our non-development teams. As a result, we will be reducing the number of non-development positions in North America and anticipate a related process in our regional offices over the coming months subject to local requirements. This was an extremely difficult decision, and we want to acknowledge the effort of everyone who has contributed to Blizzard. To assist with the transition, we are offering each impacted employee a severance package that includes additional pay, benefits continuation, and career and recruiting support to help them find their next opportunity. These people are members of the Blizzard family—they’ve cared deeply and contributed greatly to our work here and we are extremely grateful for all they’ve done.
As difficult as some of these organizational changes are, I am confident in Blizzard’s future and we will continue working hard to live up to not only our mission, but your expectations. We look forward to sharing everything with you when it’s ready.
J. Allen Brack
Is this a bump in the road for Activision Blizzard, or is it something more? What do you think they need to do to recover? Let us know in the comments below!