Recapping a Brutal Day at Activision Blizzard: 800 Layoffs While Activision Touts Record Financial Results

Activision Blizzard announces record profits, then promptly lays off 800 employees.

Activision Blizzard held its Q4 earnings call today with investors and announced a "record year" of profit. Which is why it's so jarring that Activision Blizzard also took the time to announce an eight percent reduction in staff, or 800 layoffs based on employee headcounts from last year.

"While our financial results for 2018 were the best in our history, we didn't realize our full potential," Activision Blizzard CEO Bobby Kotick told investors in today's earnings call. Activision Blizzard reported a net revenue of $2.38 million for the quarter and $7.5 billion for the full year. As a kicker, Activision Blizzard also announced it would raise shareholder dividend to nearly nine percent, which would benefit investors and stockholders.

800 Layoffs at Activision Blizzard

The parties that won't benefit from Activision Blizzard's record financial results are nearly 800 Activision Blizzard employees who've been laid off today. Blizzard President J. Allen Brack notified Blizzard staff of the layoffs today in a letter acquired by Kotaku. Laid off employees will receive a comprehensive severance package, health benefits, career coaching, and job placement help, Activision said. Kotick told investors the layoffs were intended to restructure the company and scale down departments where spending was unnecessary.

Blizzard isn't the only Activision company facing layoffs. VentureBeat reports that Activision Blizzard's mobile games company, King, shut down studio Z2Live resulting in the loss of 78 jobs. Z2Live developed mobile games like MetalStorm: Online and Battle Nations but was likely cut as part of the overall restructuring.

Despite discussing plans for Activision Blizzard's 2019, news of the layoffs dominated social media as former Blizzard employees began sharing whether they have been affected by the layoffs. Like the layoffs at Telltale, and major studio layoffs before it, grassroots job hunting campaigns sprang up to help affected employees find new work at new companies. The layoffs primarily affected back office, commercial, marketing, and communications departments.

On social media, Blizzard employees are announcing their departure from the company as part of the layoffs. Meanwhile an updated list of open game development jobs is also being shared among colleagues and those affected by Activision Blizzard's decision today.

No New Blizzard Games This Year

Activision Blizzard announced plans to increase developer resources by 20 percent in 2019 for both core and incubation teams as the company braces for a "transitional" year. The company also said that Blizzard would not be releasing a major frontline title in 2019, instead focusing on stabilizing Overwatch and Hearthstone which stagnated in 2018.

Activision Blizzard is planning to streamline its Call of Duty development system across Treyarch, Infinity Ward, and Sledgehammer Games. The new Call of Duty from Infinity Ward will see a new campaign, which many have taken to mean single-player story mode, after it was skipped over in last year's Call of Duty: Black Ops 4.

Activision Blizzard's 2019 outlook is mostly restrained, for lack of a better word. Activision Blizzard announced that in-game monetization (or microtransactions) will not improve as quickly as the company hopes. Call of Duty players have had a largely negative reaction to Black Ops 4's microtransactions which Activision Blizzard says resulted in "weaker than anticipated retail demand."

Meanwhile Activision Blizzard is moving ahead with plans to bring more core titles to mobile, including a new mobile Call of Duty game. This is despite the largely negative reception to Blizzard's Diablo Immortal mobile game announced at BlizzCon 2018.

A Painful Start to 2019

Activision Blizzard is off to a painful start for 2019, but at the end of the day the results are clear. Activision Blizzard as a company is profiting and investors are seeing those profits pay dividends to their financial portfolios, but 800 employees have lost their jobs.

The layoffs and company closures dominated the news cycle for today's earnings call, and not even scant details of the new Call of Duty did much to budge the conversation on social media. The results of Activision Blizzard's decisions today will likely shape the ongoing discussion of labor and unionization within the video game industry, and continue to drive questions about the state of the industry as a whole.

Header image courtesy of Blizzard Entertainment

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