It takes a special level of cruelty to announce that 2018 was your company's best year ever, personally make millions of dollars a year, and simultaneously decide to fire hundreds of people for no other reason than the millionaires who own you wanted to make a little bit more.
— Tom Marks (@TomRMarks) February 12, 2019
Activision is cutting roughly 770 people — or 8% of the company’s employees due to the game developer not meeting expectations.” The layoffs affect all of Activision’s organizations, including Activision, Blizzard, King, and High Moon. Hints about Activision Blizzard’s instability began late last year.
The news came on the heels of announcement of Activision Blizzard’s Q4 and 2018 earnings, where CEO Bobby Kotick gave the company’s “record results in 2018.” He added that they are going to increase dividends to stockholders by 9%. Even with this success, the company failed to reach their expectations for that year.
Kotick went on to comment that,
“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.”
Now they’re restructuring the company and setting lowered expectations for 2019. Kotick stated that the layoffs would primarily focus on non-game-development departments while they bolster development staff. In particular, Blizzard only lost employees in non-game-development departments, like eSports and publishing. Both of those departments were expected to take major hits.
Blizzard President, J. Allen Brack had this to say in a note 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. There’s no way to make this transition easy for impacted employees, but we are doing what we can to support our colleagues.”
The layoffs will include a comprehensive severance package, including continued health benefits, career coaching, and profit-sharing bonuses for the previous year.
Jason Schreier of Kotaku had sources tell him that the company was bracing for the layoffs today, hugging and crying in the parking lot.
As they brace for today’s layoffs, Blizzard employees are crying and hugging in the parking lot, according to a person there. Still no official word from the company, but people in publishing and esports are expecting big cuts. Earnings is at 5pm ET – news should be around then.
— Jason Schreier (@jasonschreier) February 12, 2019