Activision Blizzard Begins Cutting 8 Percent of Its Workforce

cageymaru

cageymaru

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Activision Blizzard announced in an earnings calls that it was going to cut 8% of its workforce. The cuts will affect almost 800 employees primarily in sales and administrative duties as the company seeks to consolidate those departments. The company also announced that it will increase the number of developers by 20%. These employees will work on the most lucrative franchises like "Call of Duty" and "Candy Crush." This will allow the company to accelerate the creation of new content for franchises. Activision Blizzard didn't announce new games coming for 2019. The stock has lost 50% of its value since October 2018.

"We're making changes to enable our development teams to create better content for our biggest franchises more quickly," Mr. Kotick told analysts. Activision Blizzard also plans to launch a new city-based league for "Call of Duty," akin to its existing "Overwatch" league. In its latest quarter, the company said its number of monthly active users rose about 11 million to 356 million after declining for three consecutive quarters.
 
Record revenue by them, but still not good enough. They need that Chinese market. Cheaper games to make and potentially far more revenue than the awful Western market of having to put out a quality game right off the bat.
 
Stock market trading is a failed model. We need to erase these accounting shell games.


Re these layoffs, IME, company chose people with ideas disruptive to the establishment to purge. This is why even as organizations die they dont change.

If you have never read I would strongly recommend reading the "Gervais rule" and more importantly "the iron law of institutions" by Freddie deBoer I would recommend as both as then your worldview begins to predict these cycles.

https://www.ribbonfarm.com/2009/10/07/the-gervais-principle-or-the-office-according-to-the-office/
 
Nytegard said:
Record revenue by them, but still not good enough. They need that Chinese market. Cheaper games to make and potentially far more revenue than the awful Western market of having to put out a quality game right off the bat.
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Not good enough for their investors. Making money isn't enough, they need growth to please their investors.
 
DukenukemX said:
Not good enough for their investors. Making money isn't enough, they need growth to please their investors.
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The stocks driven corporate world is just bizarre to a point of perversion. There is no such thing as infinite growth, something will eventually give and burst. Jim did bring a good example, if you make a product that everyone wants and everyone in the world buys, the investors expect you to do better next year. How a screwed up is that!? And yet, this is the reality and here we are, triple AAA gaming is about to collapse. I agree that stock market should just die and corporate world go back to the old ways where just making money is the most important thing, not unsustainable infinite growth that faceless investors demand.
 
Nytegard said:
Record revenue by them, but still not good enough. They need that Chinese market. Cheaper games to make and potentially far more revenue than the awful Western market of having to put out a quality game right off the bat.
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The Stock Market is driven by short term goals, specifically the expectation of increased revenue in the future. That's why China's giant market is so attractive. And given that most executive pay is held in stock (thanks to the lower Capital Gain rate), it's no surprise that executives are also driven by increasing stock price, as it correlates directly to their own pay.

The sad part is how simple this is to fix: Simply mandate that at least 25% of all of a companies common stock must be in the hands of non-executive level employees. Give employees a seat at the table, and this type of profit-hoarding goes the way of the dodo. Several European countries do this, and it works reasonably well.
 
MaZa said:
The stocks driven corporate world is just bizarre to a point of perversion. There is no such thing as infinite growth, something will eventually give and burst. Jim did bring a good example, if you make a product that everyone wants and everyone in the world buys, the investors expect you to do better next year. How a screwed up is that!? And yet, this is the reality and here we are, triple AAA gaming is about to collapse. I agree that stock market should just die and corporate world go back to the old ways where just making money is the most important thing, not unsustainable infinite growth that faceless investors demand.
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The problem is that it's impossible to startup business at this point without the money provided by investors, due to how large incumbent businesses are. See how much money Tesla has had to sink into mass producing a single car model; there's no way to raise that type of capital outside the stock market.

The problem isn't the market; the problem is that the majority of shares are held by investment firms. Give a chunk of stock to non-executive employees, and this excesses go away.
 
From that article:
'Blizzard employees receive twice yearly bonuses based on how the company performed financially.'

MBN
 
They also announced a $1.5B stock buyback program over the next two years.
Playing to the shareholders with this move.
 
Yeah they really need to start making new games and stop riding the same games for a decade. Wow has been going for so long, Starcraft 2 has been shat on into a service type of game, CoD same shit every year.
 
DukenukemX said:
Not good enough for their investors. Making money isn't enough, they need growth to please their investors.
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Well the liberals want to stop stock buybacks and dividends, sooooo?

How to make money?
 
its kinda sad when Magic: The gathering got bought by Hasbro they were making year over year profit, but the problem is hasbro does quarterly earnings and forecasting. They tried to explain "but we dont put out new sets that often" Hasbro - "you do now" the whole thing crashed hard and they hadto reorganize their entire development strategy.

It sounds like AMD was in the same boat, NAVI wasnt ready but its hurts their stock value to not show scheduled increases so they just slapped together a new card reusing a workstation gpu design.

This earnings and forecasting bullshit is going to drive another crash and depression. Then well all end up paying for it with pocket lint.
 
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As a WoW player I am seeing a few of the CMs tweet they have been laid off, not sure how those are sales and administrative?. Makes you wonder if Mike Morhaime saw all this coming and it factored into his decision to retire and leave.
 
Twisted Kidney said:
If only those employees could organise themselves into some sort of group so it was harder to slash them like excess baggage whenever somebody wants to fellate the shareholders.
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Yep. they could then produce even better games, with that famous "Can't fire me I'm in a UNION!" quality...
 
oldmanbal said:
Instead of making games the public is begging for, they've decided to just axe their staff, a marvel of how not to run a gaming company.
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Actually it seems they are mostly firing sales, marketing, and administrative positions while hiring 20% more devs. That's a decent way to go, focusing on candy crush is not though.
 
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goodrob said:
As a WoW player I am seeing a few of the CMs tweet they have been laid off, not sure how those are sales and administrative?. Makes you wonder if Mike Morhaime saw all this coming and it factored into his decision to retire and leave.
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The writing was most definitely already on the wall and he saw that. My guess is Activision started pushing a lot of influence into Blizzards administrative decisions even so much as forcing 3rd party titles on the client they created specifically for Blizzard games. The minute he announced his leave I sold everything I had of ATVI.
 
NickJames said:
The writing was most definitely already on the wall and he saw that. My guess is Activision started pushing a lot of influence into Blizzards administrative decisions even so much as forcing 3rd party titles on the client they created specifically for Blizzard games. The minute he announced his leave I sold everything I had of ATVI.
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I actually started buying some of their stock recently. hopefully int he long run it will go up at least a little. I kinda hope Blizzard buys themselves out of activision and can focus on them selves again.
 
goodrob said:
I actually started buying some of their stock recently. hopefully int he long run it will go up at least a little. I kinda hope Blizzard buys themselves out of activision and can focus on them selves again.
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I was thinking about it as well. I had originally bought in at 33 and sold at Blizzcon last year. Made a small sum so I might just go ahead and reinvest since I do feel the stock is a bit oversold at this point and the drop was largely affected by market politics overall. This year seems like it'll be a bit stagnant but I'll keep my eye on it.
 
atp1916 said:
From that article:
'Blizzard employees receive twice yearly bonuses based on how the company performed financially.'

MBN
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My company does this too...on the provision that every segment meets its goals for the year. Of course, there's always one segment that misses it's (very aggressive) targets. In any case, those bonuses still add up to a fraction of the value added through employees work.
 
HorseproofBacon said:
Actually it seems they are mostly firing sales, marketing, and administrative positions while hiring 20% more devs. That's a decent way to go, focusing on candy crush is not though.
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It's possible many of those they are parting ways with were teamed with Bungie for destiny. . .
 
Rahh said:
I think you missed the part of the 8% being sales and their adding 20% more devs to pretty much do just that. RTFA
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I'm sorry if I'm not lining up with the masses to buy a candy crush game and pump money into micro transactions.
 
NickJames said:
I was thinking about it as well. I had originally bought in at 33 and sold at Blizzcon last year. Made a small sum so I might just go ahead and reinvest since I do feel the stock is a bit oversold at this point and the drop was largely affected by market politics overall. This year seems like it'll be a bit stagnant but I'll keep my eye on it.
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Honestly it might be a really good idea to by stock in them atm. Sure the direction they are going towards now is a huge slap in the face but they are bound to make bank on these garbage mobile games. China is going to eat that shit up.
 
oldmanbal said:
I'm sorry if I'm not lining up with the masses to buy a candy crush game and pump money into micro transactions.
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From the article:

"The company said it would be cutting mainly non-game-development departments and bolstering its development staff for franchises like Call of Duty and Diablo."

I didn't see anything that said Candy Crush?
 
vegeta535 said:
Honestly it might be a really good idea to by stock in them atm. Sure the direction they are going towards now is a huge slap in the face but they are bound to make bank on these garbage mobile games. China is going to eat that shit up.
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I feel the same way, when it comes to stocks you always have to separate your morals from your finances. I am pissed about the direction but I know this is exactly what shareholders want so might as well make some money along the way.
 
The people losing their jobs aren't just being tossed into the street. From the announcement:
To assist with the transition, we are offering each impacted employee a severance package that includes additional pay, benefits continuation, and career and recruiting support to help them find their next opportunity.
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GlowingGhoul said:
Yep. they could then produce even better games, with that famous "Can't fire me I'm in a UNION!" quality...
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Ah the old myth. Glad to see anti-labour propaganda still holds lots of influence.

You know that companies fire unionised employees all the time, right?

You just need an actual reason to do it.

"I want a bigger bonus on my $13,751.02 an hour job." Isn't generally considered an actual reason by humans.

Crazy stuff this "communism".


$13,751.02 per hour is what Kotick actually makes.
 
cageymaru said:
These employees will work on the most lucrative franchises like "Call of Duty" and "Candy Crush."
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hmmm, im thinking i just thought of the next big game for them


Candy crush: call of duty edition

play in the world of candy crush with a group of others as you try to deny the enemy access to needed candy patterns
 
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