Activision Blizzard announced Tuesday that it is undergoing restructuring, indicating that the company is firing 8% of its 9,600 employees (about 775 people) while concentrating its efforts on Call of Duty, Candy Crush, Overwatch, Warcraft, Hearthstone and Diablo franchise.
Activision defined the move as a de-prioritization of initiatives that did not meet expectations. CEO Bobby Kotick said the cuts would come from support staff as the company consolidates its business operations and reorganizes its marketing efforts. Activision will invest more in live services, Battle.net, eSports and advertising efforts.
The company added that it will increase development resources by 20% in 201
" While our results for 2018 were the best of our history, we did not realize our full potential, "said Bobby Kotick, Chief Executive Officer of Activision Blizzard in a statement of earnings." To help us reach our full potential, we have made a number of important changes to leadership. These changes should enable us to achieve the many opportunities offered by our industry, in particular with our powerful property franchises, our strong commercial capabilities, our digital connections to hundreds of millions of players and our extraordinarily gifted employees. "
Net sales for the quarter were $ 2.38 billion, outperforming $ 2.24 billion. The net profit for the year was $ 1.8 billion compared to $ 273 million for 2017. Activision surpassed last year's net revenue with $ 7.5 billion versus $ 7.02 billion in 2017.
Activision Blizzard shares were hit on Monday after the rumors that emerged from layoffs. The value of sharing continued to rise during the day and continued to rise slowly in after-hours trading. It is not unusual for investors to react favorably to layoffs, which indicates that a company is taking steps to increase shareholder value.
A sword has been hanging over by Activision Blizzard employees since Friday, when Bloomberg reported that the company would have fired hundreds of employees. Before the annual report of the publisher's profits for 2018, those layoffs are now reality.
Activision Blizzard reported a massive restructuring and realignment in recent months. It began innocently in May 2017, when Bungie and Activision announced that "Destiny 2" would be launched exclusively on Battle.net for PC players. It was the first time that Activision had openly taken a dip in Blizzard's pool.
The two companies had largely worked independently under the leadership of former Blizzard president Mike Morhaime. In March 2018, the parent company Activision Blizzard seemed to exert more control, installing Amrita Ahuja (former senior vice president of investor relations for Activision Blizzard) as Blizzard CFO. A second title of Activision Publishing, "Call of Duty: Black Ops 4" was announced as an exclusive Battle.net on PC, signaling that the lines between the two branches were becoming permeable.
Morhaime, a co-founding company, announced its departure in October 2018, signaling the end of a 27-year run. A month later, Blizzard infuriated hard "Diablo" players by announcing a mobile-only game in collaboration with NetEase as a key piece of his key Blizzcon key.
As the new fiscal year started for the publisher in January, he suffered the loss of two chief financial officers, Spencer Neumann (who managed finance for Activision Blizzard) and Ahuja. Dennis Durkin, former CFO and chief corporate officer, has been chosen to return to his financial role and also take over the leadership of the company's emerging business division. The reintegration earned him a signing bonus of $ 3.75 million and $ 11.3 million in performance-based equity subsidies.
Blizzard also boasted of a recent venture out of Disneyland. The company has rented the entire park for the use of its employees. Restructuring takes time and, from a perspective perspective, it was a dispatch for employees that the company would only be able to leave a month later or a waste of money that could have been used to hold back a bit more than those fired.
On the Activision Publishing side, the portfolio has shrunk. With Toys to Life essentially dead, the Skylanders franchise became dormant. Guitar Hero Live was completely at sunset, with Activision offering reimbursements for those who bought the game recently. This left the company with two franchise attempts ("Call of Duty" and "Destiny"), remaaster ("Spyro Reignited Trilogy" and "Crash Bandicoot N. Sane Trilogy"), and the next "Sekiro: Shadows Die Twice" by From Software.
In the month of January, just before the company's mandatory silence, Activision Blizzard and Bungie split up. The "Destiny" publication rights held by Activision Blizzard were acquired by the studio, leaving Activision Publishing with a thin lineup.