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ATVI Investor Call Reveals High Profits While Simultaneously Laying Off Nearly 800 Members of Blizzard's Workforce

The Activision Blizzard Investor Relations call is underway and Kotaku is reporting that the layoff process has started with employees being informed  today. "We didn't execute as well as we had hoped in 2018 and fell below what we might expect. We didn't achieve the player reach and goals we set for 2018." said Bobby Kotick.

Layoff notice was given to employees from J. Allen Brack obtained by Kotaku:

“Over the last few years, many of our non-development teams expanded to support various needs,” Blizzard president J. Allen Brack said in a note to staff around 1pm PT that was obtained by Kotaku. “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. I’m sorry to share that we will be parting ways with some of our colleagues in the U.S. today. In our regional offices, we anticipate similar evaluations, subject to local requirements.”

Nearly 800 employees are affected by the restructuring.

Employees will receive a comprehensive severance package including health benefits, and job placement assistance as well as profit-sharing for 2018 to those laid off at Blizzard.

Game Informer shared the layoff news this way:

In stark contrast to stories of employees hugging each other and crying in the parking lot, Activision Blizzard's longtime CEO Bobby Kotick began this quarter's earnings call by bragging about how 2018 was the best year for the company in terms of financial results ever. Despite this, Activision Blizzard set their target of $3.09 billion dollars extremely high and failed to hit it to the tune of a billion dollars short, resulting in a dipping stock price and decision to reorganize.

Takeaways:

  • an "intense focus on excellence so we don't disappoint our players"
  • change and new leadership are required
  • Blizzard's results are a "nuanced story" 
  • Overwatch & Hearthstone have declined in player in-game purchases
  • WoW's MAUs have declined "as expected" after the launch of an expansion
  • refocus on key IPs across releases, mobile, geographic expansion
  • deemphasizing projects that are not generating adequately
  • 8% reduction in staff in non-development positions, mostly in publishing and eSports
  • 2019 is a year of transition
  • Call of Duty coming to mobile in some form via Tencent
  • no frontline release for Blizzard in 2019
  •  

Full results are found here.

Q&A -

  • refocused on franchises with the highest potential for growth and investing in development
  • removing duplication and inefficiency
  • remove initiatives that aren't meeting expectations
  • Brack - largest PC, mobile and console games in our history
  • Brack - We want to deliver more content to our communities more quickly
  • significant resources are being invested in our core franchises
  • ATVI will increasingly be present in the mobile space using the F2P model
  • delivery of more content to Overwatch is important to us
  • revenue in Overwatch has declined, though community engagement is "high" according to Brack
  • Destiny was "not meeting our financial expectations" and it wouldn't have been a "material contributor to our financial models"
  • MOBILE IS A TOP PRIORITY FOR US
  • resources will be added to accelerate our mobile releases
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Suzie Ford / Suzie is the Associate Editor and News Manager at MMORPG.com. Follow her on Twitter @MMORPGMom

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