Activision Blizzard cuts hundreds of jobs despite ‘record revenue’ year
Allegra Frank, reporting for Polygon:
Before announcing the layoffs, Activision Blizzard noted that it posted record revenues for the 2018 fiscal year. According to its fourth-quarter earnings report, the company made $7.26B in physical and digital sales, compared to $7.16B in 2017. But CEO Bobby Kotick explained that the numbers failed to meet expectations.
“While our financial results for 2018 were the best in our history, we didn’t realize our full potential,” Kotick said in the report. During the Q&A portion of the investor call, he described the layoffs as a “top-five career-difficult moment for me personally.”
Despite the self-proclaimed underwhelming revenues and the layoffs, Activision Blizzard said that it plans to expand its development teams on key, internally owned games (like Call of Duty, Candy Crush, and Overwatch) by 20 percent. Funding this will come through “de-prioritizing initiatives that are not meeting expectations and reducing certain non-development and administrative-related costs across the business,” according to its fourth-quarter fiscal earnings release. Other non-core positions will be eliminated to rededicate resources toward beefing up its development slate, the team said on the call.
This news is awful. No way around it. Record revenue and cutting 800 jobs. Sure, increasing margins, non-core development, loss of Bungie, blah blah. But 800 jobs?! Banking on a single IP (Destiny) and not anticipating what CEO Bobby Kotick called a “top-five career-difficult moment for me personally” is insane. And how is the loss of 800 jobs not number one?
Per Kotaku reporter Jason Schreier, Kotick took home 28+ million in 2017. I get the reasoning behind highly paid executives; I wouldn’t want their jobs. But to say the loss of 800 jobs is “top-five” is an insult. It should be number one, with a bullet.
I feel for the employees. I feel for fans. I don’t see a great outlook for core Blizzard properties outside of World of Warcraft — a recurring revenue behemoth. And that’s sad. I would have loved to see the A/B 800 reallocated to other Blizzard franchises. If the focus is entirely on a Call of Duty, Overwatch, and Candy Crush, I fear the end of Blizzard as we know it.