Activision Blizzard, the Santa Monica, California-based video-game maker, announced on an earnings call yesterday (Feb 12) that it would lay off 775 people, or 8% of its workforce. At the same time, CEO Bobby Kotick reported record sales figures for the fourth quarter and 2018.
The incongruity of those two statements made people like Chris Kohler, an editor at gaming magazine Kotaku, uneasy. He tweeted: ”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.”
Several others in the industry expressed similar disbelief, and some offered messages of support for the laid-off employees.
The company’s explanation for the layoffs? “We measure our success by growth in reach, engagement, and player investment, and while we had record financial results in 2018, we didn’t achieve the reach engagement and player investment goals we set for ourselves,” Kotick said, just before revealing the plans to let people go.
Coddy Johnson, the company’s chief operating officer, said the restructuring would allow for investments in the company’s strongest franchises, while it backs away from those that were struggling.
Moneymakers like Call of Duty, Candy Crush, Diablo, Hearthstone, Overwatch, and Warcraft, will be the focus now, Ars Technica reports, and for these titles, Activision Blizzard plans to hire more staff. “We’re confident that over time this plan will enable our teams to accelerate the delivery of high-quality content to our communities,” Johnson said.
Not everyone was convinced.
Activision Blizzard announced that revenue landed at $2.84 billion for the fourth quarter of 2018, versus an expected $3.04 billion. The company has suffered from a series of high-level executive departures recently, and the so-called Fortnite effect. Epic Games’ Fortnite, a free-to-play multiplayer game, has become an absolute sensation, stealing market share from competitors.
The layoffs, Activision explained, would mainly affect people in non-development roles, those in publishing and esports, for instance. On Twitter, a producer for a Seattle-based developer called out the company and its few defenders for being too dismissive of these workers, as if people in communications, marketing, and sales were not essential to a game’s success: