Today my former company Blizzard Entertainment laid off a substantial part of its workforce. I had left the company about a year ago, but many of my friends and colleagues remained and were affected by today’s job cuts.
For those of you not familiar with the company, Blizzard is a storied video game developer based in Irvine, California which has published many of PC gaming’s most venerated franchises including World of Warcraft, StarCraft, Diablo, Heartstone and Overwatch. The company is a business unit of Activision Blizzard -a company formed on a merger between Blizzard and Activision- which is also known for hits like Call of Duty and Candy Crush.
Blizzard had been riding high for a number of years, but some unfortunate delays in the product pipeline coupled with some bad management decisions and heightened competition led to a down year in 2018 and poor outlook for 2019. As a result, the company decided to undertake a restructuring and layoff employees. This happens all the time in the corporate world, so the fact that there were layoffs is not really the point of the diary. It is the way that the layoffs were handled that is noteworthy.
First, during the past four months, there have been a series of management departures and shenanigans. The popular longtime CEO and founder of Blizzard announced his retirement in October. Then in December the CFO of the parent company Activision Blizzard suddenly quit to take a job at Netflix. He was replaced by an alumnus Activision exec who Earned a cool $15 million signing bonus just to take the role.
Fast forward to last week- as Activision Blizzard prepared for their upcoming earnings call, word leaked out that layoffs would occur the following week, leaving employees fretting about their futures over the weekend.
Today, just as earnings calls were starting, employees were informed of their fates. While managers and HR staff informed those who were being let go, the CEO of Activision Blizzard literally kicked off his earnings call by crowing that the company had achieved record results in 2018 with $1.4 Billion in revenues and $740 million in operating income. Sounds pretty amazing right? But there was a problem- earnings had missed targets and that the company would lay-off 8% of its workforce as a result.
So who paid the price for this miss? Not the management team. Every single one of them walked away safe and well compensated (data from 2017, but illustrative) No they let go the workers- mostly in non-development roles like community support, marketing and customer service.
Again, I understand that layoffs happen. But for a company with 50% profit margins to determine that 800 employees needed to go while no executive shared their fate is an incredible indictment of our corporate governance system that puts the value of shareholders above those who do the work.
Wednesday, Feb 13, 2019 · 3:04:03 PM +00:00
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Overwatched
Thanks for recommending this story! I left out a couple of things. First, layoffs not only hit Blizzard; they hit Activision Publishing and King (makers of Candy Crush) as well. I focused on Blizzard as I am more familiar with them.
Second, what makes this lay-off jarring is that Blizzard used to be run as a semi-autonomous business unit and the original management team built a player and employee friendly company. Mass layoffs were virtually unknown- last one was in 2010 I believe. This lay-off is illustrative of how far that old culture has changed.
Third, if anyone who was affected by the layoffs is reading this, I am deeply sorry that your world was shaken up. Take advantage of the resources that Blizzard is offering as you transition. Your resume is powerful — you will find a new role somewhere.