Despite posting the best set of financial results in its history, Activision Blizzard has said that it will be cutting 8% of its staff as part of an effort to fund investment in developers for its various game franchises.
Activision Blizzard missed analyst profit and revenue forecasts, Reuters reported, with the company facing increased competition from hit franchises like Fortnite.
Making the calculation of "nearly 800" workers being retrenched, Reuters noted that Activision Blizzard had around 9,800 staff at the end of 2017.
Kotaku's Jason Schreier reported that staff were not informed about the impending job cuts until the day of the results announcement. Citing sources, the report stated that the retrenchments have affected Activision publishing, Blizzard, King, and some of Activision’s studios, including High Moon.
In a press release that accompanied the results, Activision Blizzard CEO Bobby Kotick was quoted as agreeing with analysts, saying that the company had not realized its full potential in 2018.
While our financial results for 2018 were the best in our history, we didn’t realize our full potential. To help us reach our full potential, we have made a number of important leadership changes. 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.
Firing to hire more developers
The Activision Blizzard press release further stated that the company will increase its investment in development, increasing the number of developers working on its core franchises by 20% by cutting costs elsewhere in the business.
The number of developers working on Call of Duty, CandyCrush, Overwatch, Warcraft, Hearthstone and Diablo in aggregate will increase approximately 20% over the course of 2019.
It will fund this investment in developer resources by "de-prioritizing initiatives that are not meeting expectations" and "reducing certain non-development and administrative-related costs across the business," Activision said.
Activision Blizzard also said that it will be integrating its global and regional sales and go-to-market departments, partnerships, and sponsorships capabilities. It didn't explain what that means, how many staff would be affected, or what it estimates the annual savings to be by doing this.
It did forecast that it will spend about $150 million on this restructuring, which will mainly be severance and facilities costs.
Kotaku reported that at Blizzard, the retrenchments only seemed to affect departments that aren't involved in development, such as publishing and e-sports.
Citing a letter from Blizzard president J. Allen Brack, staff being laid off in his department were promised a comprehensive severance package, continued health benefits, career coaching, job placement assistance, and profit-sharing bonuses for the previous year.
A similar note, excluding mention of bonuses, was published on the Blizzard website following the announcement from Activision.