As everyone expected, the video game company whose various units publish everything from franchises like Call of Duty to Candy Crush has just announced a massive wave of layoffs affecting 8% of the company.
Activision Blizzard started informing employees Tuesday afternoon about the layoffs, which are believed to affect almost 800 workers of the 9,600 the company employed in 2018. CEO Bobby Kotick also disclosed the coming layoffs to investors during the company’s quarterly earnings call this week. Ironically, Kotick also praised Activision’s results for 2018, having hit a “record” once again — it’s just that the company still fell short of Wall Street’s expectations.
Because of that, it’s pressing forward with restructuring and layoffs, a restructuring that involves the company ditching some aspects of its business altogether, and doubling-down on its most lucrative game franchises.
Indeed, this is not just a story of cutting. Kotick said the company will also be adding more development resources — in some cases as much as 20 percent more — this year on the franchises it’s now most focused on. “The company will fund this greater investment by de-prioritizing initiatives that are not meeting expectations and reducing certain non-development and administrative-related costs across the business,” the company said in a release accompanying the quarter’s earnings.
A Variety report, meanwhile, lays out some of the myriad challenges Activision is facing, including a shrinking portfolio on the game publishing side of the business:
With Toys to Life essentially dead, the Skylanders franchise has gone dormant. Guitar Hero Live has been entirely sunset, with Activision offering refunds for those that purchased the game recently. That left the company with two tentpole franchises (“Call of Duty” and “Destiny”), remasters (“Spyro Reignited Trilogy” and “Crash Bandicoot N. Sane Trilogy”), and the upcoming “Sekiro: Shadows Die Twice” by From Software. In January, right before the company’s legally mandated quiet period, Activision Blizzard and Bungie parted ways. The “Destiny” publishing rights held by Activision Blizzard were acquired by the studio, leaving Activision Publishing with a thin lineup.
It’s no secret that companies like Activision are also having to find their way across a new gaming landscape that’s being dramatically upended by free-to-play titles like Fortnite, which marks a break from the game industry’s past of producing expensive titles on discs that gamers buy to play on dedicated consoles.
