Activision Blizzard CEO Bobby Kotick began today’s year-end earnings call by touting the company’s “record results in 2018.” Later in the call it was announced that 8% of Activision Blizzard’s almost 9600 employees would be laid off, which adds up to about 770 people. Because even if you make more money than you ever have before, you’re still a failure if you don’t meet your expectations. And since we apparently can’t expect executives to cut their own pay, the answer is always to lay off the rank and file.
You can read the company’s 2018 earnings report here.
“While our financial results for 2018 were the best in our history, we didn’t realize our full potential,” said Kotick, who earned almost $30 million in 2017. In response the company has lowered its 2019 expectations, and will focus development and increase spending on a small roster of core titles: Call of Duty, Candy Crush, Diablo, Hearthstone, Overwatch and Warcraft. Oh, and it also deprived almost 770 employees of their livelihoods.
The layoffs will be felt across the various companies beneath the Activision Blizzard umbrella, with most of the cuts reportedly coming in departments outside game development. Kotaku reports that at Blizzard, for example, the layoffs are primarily hitting the esports and publishing wings of the company.
“To help us reach our full potential, we have made a number of important leadership changes,” Kotick is quoted as saying in the earnings report. “These changes should enable us to achieve the many opportunities our industry affords us, especially with our powerful owned franchises, our strong commercial capabilities, our direct digital connections to hundreds of millions of players, and our extraordinarily talented employees.”
One of those leadership changes was rehiring Dennis Durkin, a former CFO who returned to that role in January, with an almost $4 million signing bonus and over $11 million in stock grants based on performance, in addition to a salary of $900,000 and another bonus just over $1 million. His leadership skills will surely be needed to help the company adjust to the loss of all those positions, whose duties and responsibilities will presumably have to be assumed by other employees who already had their own work to handle.
The new focus on a smaller line-up of franchises was hinted at last month, when Activision and Destiny developer Bungie ended their relationship, with Bungie retaining full rights to the shooter-MMO hybrid. Despite a dedicated fan base, Destiny 2 had underperformed, and no longer fit into Activision Blizzard’s plans. Now that we know where the company is headed, it’s clear that several hundred of its employees also no longer fit into the more-profitable-than-ever company’s plans.
Here’s a Getty Images photo of Bobby Kotick and DJ Khaled at the Overwatch League Grand Finals, for no particular reason.