The industry is in a state of shock following Activision’s 1-2 punch of posting record results in 2018 and then laying off a staggering 775 employees, around 8% of its total staff. The layoffs had been rumoured for quite some time, but the scale of them surprises as does the timing with the otherwise positive report by CEO Bobby Kotick.
It’s part of a major rebalancing of the company around its shrinking portfolio of games with most of those affected reportedly holding roles on publishing and marketing side of the Activision, Blizzard and King in the US. As Kotick put it, this is to “”de-prioritizing initiatives that are not meeting expectations and reducing certain non-development and administrative-related costs across the business,” but it also included the closure of 78-man mobile developer Z2Live.
In a note to employees acquired by Kotaku, Blizzard president J. Allen Brack explained:
Over the last few years, many of our non-development teams expanded to support various needs. Currently, staffing levels on some teams are out of proportion with our current release slate. This means we need to scale down some areas of our organization in the US today. In our regional offices, we anticipate similar evaluations, subject to local requirements.
Going forward, Kotick said that Activision Blizzard will be focussing on live service games in franchises like Candy Crush, Call of Duty, Overwatch, Warcraft, Diablo, and Hearthstone, Battle.net and esports, where Overwatch League is now their crown jewel. You can note how there’s just a single Activision series in that list, with many of the company’s eggs now Blizzard’s basket.
It’s been clear for a while that Activision-Blizzard has been hedging its bets around a smaller and smaller number of games. Blizzard still have several current and upcoming projects, but Activision has long retreated from licensed movie tie ins, put series like Skylanders and Guitar Hero out to pasture, and recently allowed Bungie to exit their fractious partnership on Destiny. With all of these changes, the publishing side of the twinned companies may have ended up overstaffed, but some developers are still being hit, such as High Moon.
Thankfully employees are being supported through this with a full severance package, including continued health benefits and assistance in finding new work. Even so, the calls and motivation for workers in the games industry to unionise are now stronger than ever. Such restructuring efforts and layoffs have long been symptomatic of the boom and bust games industry, but this is happening even in a reported boom year.
Our thoughts go out to all those affected and we wish them all the best in finding new work soon. they find work again soon.