After reporting a record year of $7.5 billion in net revenue, game publisher Activision Blizzard revealed this afternoon that it would lay off approximately 8% of its staff, or 775 employees.
“While our financial results for 2018 were the best in our history, we didn’t realize our full potential,” CEO Bobby Kotick said in the earnings report. “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.”
The game maker, one of the industry’s largest, says that it will increase development investment in its biggest franchises, such as Call of Duty, Candycrush, Overwatch, Warcraft, Hearthstone, and Diablo, while “de-prioritizing initiatives that are not meeting expectations” and reducing certain non-development and administrative-related costs across the business (i.e. laying off workers). As part of its restructuring actions, the company expects to incur a pre-tax charge of approximately $150 million.
Over the last year, the company’s shares have dropped over 36% as the company struggled with a thin slate of new titles and flat or declining user growth for key franchises such as Overwatch, Hearthstone, and World of Warcraft. For further reading about the company’s corporate challenges and its restructuring efforts, see Wall Street Journal and Variety.
Still, it can’t be denied that the company just bragged about having its best year ever financially, and the company is cash-rich. Last month, it offered a $15 million signing bonus to Dennis Durkin, its new chief financial officer. In light of the company’s strong financials, news of mass layoffs is not going over well on social media. Here’s a sampling of the reactions this afternoon on Twitter:
It's so gross to listen to Activision Blizzard talk about how incredibly well it did this year while it lays off hundreds of the people who made that happen. It's all literally happening simultaneously; conference call happening now as people are tweeting about being out of work.
— Chris Kohler (@kobunheat) February 12, 2019
Almost 800 people… I can't imagine the pain.
Dear Activision people, I'm happy to provide any of the following:
– Referrals in/outside of ArenaNet
– An ear if you need to vent
– Financial support
– Signal boosting
— Jennifer Scheurle (@Gaohmee) February 12, 2019
It makes me physically sick to see game devs and employees get laid off by a massive company like Activision Blizzard the VERY SAME DAY as their CEO announces record breaking profits. It's egregious and shameful and it's why no one should ever trust suits and why devs need unions
— Sean Finnegan (@shotbyfinnegan) February 12, 2019
After 12 years of being under the Activision Blizzard umbrella, I am now a free agent. Both companies are getting a ton of shit, but I have worked with some of the best and most talented people in the business at both places. I wish them nothing but success. PR guy LFG.
— Robert Taylor (@clipperrob) February 12, 2019
We're sorry to hear about the news of recent layoffs at Activision Blizzard. As a company full of lifelong Blizzard fans, our hearts go out to the organization and employees who are affected.
— Riot Games (@riotgames) February 12, 2019
Activision's financial report literally says 'our financial results for 2018 were the best in our history'.
Execs will receive huge, tasty bonuses for this success.
Meanwhile, 100s of people will lose their jobs because those same execs had even loftier expectations.
— Ryan Brown 🎮 (@Toadsanime) February 12, 2019
Bobby Kotick touting record revenue for Activision while simultaneously laying off 800 people w/ little notice is disgusting. Remember when Satoru Iwata cut his own salary in half so none of Nintendo's employees would be laid off? That's real leadership.
— Forrest Lee (@ForrestFurst) February 12, 2019