During today's Activision Blizzard fourth quarter results conference call, CEO Bobby Kotick announced that the company had a record year in 2018, and that it will "reduce complexity and duplication," confirming reports of impending layoffs.
"We're staffing up production on our incubation efforts faster, and increasing our investment in live services, in our tools, in our Battle.net platform, and in new areas like our fast growing esports and advertising efforts, but all with an intense focus on excellence, so we never disappoint our players," said Kotick.
"Our pipeline is excellent and our development talent the very best in the world, but we need to refocus our efforts so that our development and production resources are better aligned with our priorities. We're reducing or eliminating investment in games and initiatives that weren't living up to player expectations or our leadership teams have determined may not live up to player expectations in the future. To drive improved execution and to fund development investment, we will in certain parts of the business reduce complexity and duplication in our back office functions, consolidate certain commercial operations, and revamp our consumer marketing capabilities to reflect our continued migration to a largely digital network."
Later in the earnings call, Activision COO Coddy Johnson stated that the company will be laying off "approximately eight percent" of its employees, which amounts to hundreds of layoffs given the size of Activision Blizzard. (The company has over 9,000 employees according to its website.)
Prior to the call, Kotaku obtained a letter reportedly sent by Blizzard president J. Allen Brack saying that the expansion of the company's "non-development teams" over the past few years have left some staffing levels "out of proportion" with the developer's current release plans.
"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 US today," Brack wrote in the letter. "In our regional offices, we anticipate similar evaluations, subject to local requirements."
Brack said that employees who are laid off will be given "a comprehensive severance package," as well as profit-sharing bonuses and job search assistance.
Based on Kotick and Brack's comments, as well as a source who spoke to PC Gamer anonymously, the layoffs will primarily affect community, esports, and other departments not directly involved with programming, art, and game design. The Warcraft development team, for instance, has not been affected.
In the same conference call, Activision said that Blizzard won't be releasing any major new games this year, but that the Diablo development team will be growing. "Overall, Blizzard's management is reinforcing its pipeline with more resources than ever before to support planned mobile titles, several PC and console releases, and WoW's continued cadence of content," said Johnson.
Last month, Activision Blizzard brought on a new CFO, Dennis Durkin, who received $15 million for taking the job.