Publisher Activision Blizzard has officially begun laying off hundreds of its employees this afternoon.
The long-rumored news that the company would start to layoff employees was confirmed by Activision Blizzard CEO Robert Kotick during a conference call with investors stating that the AAA publisher intends to eliminate 8% of its workforce. As a consequence of the decision, nearly 800 of the company’s staff will be unemployed.
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Notifications were sent out this afternoon to those affected, including employees that work at Activision’s various organizations, Blizzard and King.
Kotick started the call with investors by stating that the company had “once again achieved record results in 2018″ but that the company would start to consolidate and restructure its business model after numerous financial failures incurred by the company over the past year. He also said that Activision’s overall expectations for 2019 are much lower than they were in 2018. The departments that are largely being impacted by the consolidation and restructuring are non-essential to the publisher’s day-to-day operations and increasing the number of employees in the game development departments for franchises such as Call of Duty and Overwatch.
Inside sources with knowledge of the layoffs have reported that the reductions have affected Activision, Blizzard, King, and some of the publisher’s other development studios such as High Moon.
The layoffs at Blizzard have reportedly only had an impact on non-game development departments. It was originally speculated that the developer’s publishing and e-sports departments would be affected them ost by the layoffs, but that is apparently not true so far.
“Over the last few years, many of our non-development teams expanded to support various needs,” Blizzard president J. Allen Brack said in a note that was sent out to staff at around 1:00 PM Pacific Time. The letter continued by saying that, “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.”
The letter also promised “a comprehensive severance package,” continued health benefits, career coaching, and job placement assistance as well as profit-sharing bonuses for the previous year to those who are being laid off at Blizzard. (Blizzard employees receive twice yearly bonuses based on how the company performed financially.) “There’s no way to make this transition easy for impacted employees, but we are doing what we can to support our colleagues,” Brack wrote.
The announcement of these layoffs comes after months of rumors and speculation that the AAA publisher was making plans to cut costs following poor financial performance over the past few months. Before today every Activision employee had showed up to work as normal with no idea as to whether they would be one of the unfortunate ones to be cut. Employees at the company reportedly were traumatized, crying, and hugging in the parking lot as a result of the uncertainty.
In the fall of 2018, Blizzard had released a mandate in which Activision had demanded that the company cut costs and increase game production, and as a result, layoffs were likely to afflict crucial support departments even as the developer continuously starts new projects with new development teams attached. Brack’s e-mail to employees further paints a detailed picture of the complicated situation that Blizzard developers have been faced with since last year. In the e-mail Brack stated that, “It’s critical that we prioritize product development and grow the capacity of the teams doing this work to best serve our player community,” he wrote. “We also need to evolve operationally to provide the best support for new and existing products.”
In a press release to investors, Kotick stated the following:
“While our financial results for 2018 were the best in our history, we didn’t realize our full potential. To help us reach our full potential, we have made a number of important leadership changes. These changes should enable us to achieve the many opportunities our industry affords us, especially with our powerful owned franchises, our strong commercial capabilities, our direct digital connections to hundreds of millions of players, and our extraordinarily talented employees.”
What this could mean for the future of Activision Blizzard and what could happen to these now 800 unemployed people is uncertain. One can only hope that they find steady work in the coming months.
What do you think of this news? What do you think will happen with Activision? Let us know in the comments below!