By Austin Wilson | @TheAustinPost1
Early this week, Activision-Blizzard announced it has laid off 775 of its employees.
After a rough 2018, Activision-Blizzard is laying off 8% of its staff, primarily from its non-development teams, in a new cost-cutting initiative to increase revenue and please investors. Although rumors about the layoffs have been spreading for months, the announcement that almost 800 employees were being booted was a shock to everyone.
In a post to the Blizzard community, CEO Allen Brack announced that Blizzard would be downsizing its non-development teams in the U.S. to focus resources on game development. He also states that we can see similar layoffs in regional offices in the near future.
"To better support these priorities, we need to reorganize some of our non-development teams." Allen Brack stated in a Blizzards news page, "As a result, we will be reducing the number of non-development positions in North America and anticipate the a related process in our regional offices over the coming months subject to local requirements."
Activision is providing some assistance to those who are now unemployed by offering severence packages and career support. "To assist with the transition, we are offering each impacted employee a severance package that includes additional pay, benefits, and continuation, and career and recruiting support to help them find their next opportunity."
In mid to late 2018, Activision found itself in a number of fiascos which led to investors jumping ship and a decline in stock prices.
Between the disastrous Diablo Immortal announcement during Blizzcon 2018 and the loss of Destiny following Activision's divorce from Bungie, investors began to lose faith in Activision and company stock prices took a nosedive. More evidence that the company was in trouble came to light after Activision CFO Spencer Neumann was poached by Netflix and Blizzard CFO Amrita Ahuja resigned to become the CFO for Square Inc.
Although 2018 was a PR disaster for Activision, the company still found it to be a financially successful year, earning $7.5 billion net revenue. In an earnings report, CEO Bobby Kotick stated that the financial results in 2018 were the best in the company's history.
"While our financial results for 2018 we're the best in our history, we didn't realize our full potential," Kotick states, "To help us reach our full potential, we have made a number of important leadership changes. These changes should enable us to 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."
If Activision-Blizzards employees are so talented, why let them go? The answer: to get back investors.
Investors see it as a positive when a company in turmoil lays off staff as the company reorganizes itself and it appears to have succeeded for Activision as stock prices have increased since they announced the layoffs.
Was it necessary for Activision to lay 800 employees? Youtuber Yongyea says no! In his video regarding the layoffs Yongyea points out that Activision CEO Robert Kotick earned $28 million in 2017 and new CFO Dennis Durkin was given $15 million just for accepting the postion.
Jason Scheier put in his two cents on the subject in a tweet showing that the 6 highest ranking individuals of Activision-Blizzard earned a total of $82,272,633 in 2017 as he also calls for employees to unionize.
Critics of the layoffs are also suggesting that higher ups in Activision-Blizzard should have followed the example of Nintendo's Satoru Iwata, who took a 50% pay cut instead laying off ground level employees.
Given much the company is actually earning in revenue, did they really need to fire almost a thousand people? And how many more are we going to see jobless in the coming months as the company restructures? If anyone who works for Activision-Blizzard is concerned about their employment, now would be a good time to start looking for new opportunities.
I wish the best for those who have been layed off and I hope you all find new work soon.
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