Update: Activision Blizzard announced during a recent earnings call that it’s laying off 775 employees, despite the fact that it had its best financial year ever.
Going forward, Activision will refocus its efforts on a few key franchises: Call of Duty, Overwatch, Diablo, WarCraft, Hearthstone, and Candy Crush.
Variety reports that the cuts mainly affected support staff as the company is reorganizing and consolidating its marketing and commercial operations while investing more in live services, its esports output, and its Battle.net storefront.
“While our financial results for 2018 were the best in our history, we didn’t realize our full potential,” Activision Blizzard CEO Bobby Kotick said in a statement. “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.”
Original Story: Activision Blizzard is planning to lay off hundreds of employees, according to a recent report.
An anonymous tipster told Bloomberg that the publisher is planning on announcing the layoffs on Tuesday, February 13th, following a week that saw a slight 2.5 percent dip in stock prices on February 8th. According to the source, Activision will attribute the layoffs as an attempt to “centralize functions” and boost profits.
Activision has had a wild ride the last couple months, most notably with the loss of Bungie and its publishing rights to the Destiny franchise, which is expected to “reduce annual revenue by as much as $400 million,” according to Bloomberg. The split resulted in a class-action lawsuit against Activision. Prior to that, Destiny 2: Forsaken did not achieve its “commercial expectations.” Overwatch and Hearthstone are also reportedly underperforming. Meanwhile, analysts are predicting that Activision Blizzard will only rake in a measly $7.28 billion in 2019, a 2 percent decrease over last year.
The last few months also saw the exits of some major executives within the company. Netflix poached former CFO Spencer Neumann, and Blizzard lost its own CFO to Square. Blizzard co-founder and former president Michael Morhaime also left the company in late 2018. Meanwhile, the CFO Activision hired to replace Neumann, Dennis Durkin, reportedly signed on with a $15 million bonus.
If the issue of titles “underperforming” sounds familiar, that might be because EA just said the same thing about Battlefield V, despite the fact that the latest game in its longtime series sold 7.3 million copies. However, because the game didn’t meet the sales expectations of EA’s investors, stock prices temporarily dropped a whopping $13 per share before gradually climbing back up over the course of the week. Take-Two’s stock prices also dropped after it, too, announced that it had “underperformed,” even with Red Dead Redemption 2 and NBA 2K19 raking in the dough.
Activision declined to comment to PC Gamer about the layoffs, which isn’t a good sign.