Activision Blizzard Announces Record Quarter, Will Still Lay Off Nearly 800 Employees
Thanks to key game franchises such as Call of Duty, Overwatch, and even Candy Crush, publisher Activision Blizzard was able to rake in a record $7.5 billion in revenue last year, which is nearly half a billion dollars more than it collected in 2017. Nevertheless, layoffs are coming in a bid to reach the company's "full potential."
"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," Bobby Kotick, CEO of Activision Blizzard, said in a statement.
The publisher offered a bit more specifics during a subsequent earnings call with investors, in which it acknowledged plans to sever ties with 8 percent of its workforce. That equates to around 800 people, based on there being 9,600 employees at Activision Blizzard last year.
Coddy Johnson, the company's president and COO, further added that the restructuring will focus on three areas. The first entails investing in development of the company's main franchises. Secondly, Activision Blizzard will get rid of initiatives that have not met the company's expectations. And the third is integrating the company's global and regional sales force, and its go to market, partnerships, and sponsorships so it can leverage scale.
The new strategy will come as little consolation to the employees who will ultimately be let go following the most lucrative year in Activision Blizzard's history. By most metrics, Activision Blizzard has little to be disappointed about. Call of Duty remains the best-selling console franchise worldwide, Spyro Reignited Trilogy saw a successful launch, and both Overwatch and Hearthstone saw "sequential stability," which helped offset "expected declines" in World of Warcraft.
Investors have reacted kindly to the news (presumably the the record results, and not the layoffs), as share of Activision Blizzard are up 7.4 percent in today's early morning trading.