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Layoffs at Activision Blizzard have been confirmed during the earnings call earlier today. The company plans to eliminate 8% of its non-development employees according to Activision Blizzard's CEO Bobby Kotick, who told investors that the main focus in 2019 is stabilization and restructuring due to missed expectations in 2018.
UPDATE #2: President of Blizzard, J. Allen Brack, posted about the layoffs and Blizzard's future in more detail.
Over the past few months, I’ve met with many people throughout Blizzard, talking about how we create our future. One thing that remains constant: we are committed to creating epic games and entertainment experiences.
Our development pipeline is strong, and we have the largest lineup of games that we’ve ever had. At the same time, Blizzard tries to have a level of craftsmanship and excellence in all that we do. Maintaining those standards as we continue expanding these worlds takes both time and talented developers.
With that in mind, we have plans to add to game development. We are dedicated to bringing you more content across existing game franchises and bringing our unannounced projects to life. Esports and the Overwatch League are also important priorities, and we will continue to produce great competitive content.
To better support these priorities, we need to reorganize some of our non-development teams. As a result, we will be reducing the number of non-development positions in North America and anticipate a related process in our regional offices over the coming months subject to local requirements. This was an extremely difficult decision, and we want to acknowledge the effort of everyone who has contributed to Blizzard. To assist with the transition, we are offering each impacted employee a severance package that includes additional pay, benefits continuation, and career and recruiting support to help them find their next opportunity. These people are members of the Blizzard family—they’ve cared deeply and contributed greatly to our work here and we are extremely grateful for all they’ve done.
As difficult as some of these organizational changes are, I am confident in Blizzard’s future and we will continue working hard to live up to not only our mission, but your expectations. We look forward to sharing everything with you when it’s ready.
J. Allen Brack
UPDATE #1: Community Manager Ythisens has been laid off.
Placeholder for tweet 1095450053001371649 In an effort to reinforce the foundation for growth, the plan is to invest more for their biggest, internally owned franchises and de-prioritize games and initiatives that are not meeting their expectations by reducing certain non-development and administrative-related costs across their business.
Blizzard had 35 million MAUs in the quarter (down from 37 million MAUs in Q3 2018), as Overwatch and Hearthstone saw sequential stability and World of Warcraft saw expected declines post the expansion release this summer.
Building on a 11-year partnership, Blizzard extended its joint venture with NetEase to publish its games in China through January 2023.
Activision Blizzard plans to increase development resources by 20% for Diablo, Hearthstone, Overwatch, and World of Warcraft.
Destiny did not meet financial expectations of the company, so they transferred publishing rights for the game back to Bungie.
Call of Duty was the #1 selling console franchise worldwide in 2018, a feat accomplished for nine of the last ten years. Full-game downloads for the game were over 40% of console sell-through. A mobile Call of Duty title is planned for the franchise.
The company is reducing the number of non-development positions by 8% and increasing devs across key franchises by 20%.
According to Bloomberg, Activision Blizzard plans to cut hundreds of jobs due to slowing sales Tuesday.
The layoffs are reportedly part of a restructuring aimed at centralizing functions and boosting profit. Activision Blizzard shares dropped by 2.5% to $42.88 on Friday. Hearthstone and Overwatch playerbase is shrinking. Destiny 2 sales were disappointing, and as a consequence, Activision handed over publishing rights for the game back to Bungie earlier in January. Two CFOs left Activision Blizzard so far in 2019. Spencer Neumann left to join Netflix and Amrita Ahuja left the company for Square.
Video game giants are struggling and it's not just Activison Blizzard. Electronic Arts share fell 13% Wednesday, following the latest Battlefield V disappointment. Activision Blizzard is supposed to announce these mass layoffs Tuesday. What do you think? Let us know in the comments!