Close  

Activision Blizzard to lay off 800 workers as video game sales drop

/ 05:07 PM February 13, 2019

SANTA MONICA, Calif. — Video game maker Activision Blizzard is laying off nearly 800 workers as the company braces for a steep downturn in revenue following the best year in its history.

Activision Blizzard

This June 13, 2013 file photo shows the Activision Blizzard Booth during the Electronic Entertainment Expo in Los Angeles. Image: AP Photo/Jae C. Hong, File

The cutbacks announced Tuesday illustrate the boom-and-bust cycles in an industry whose fortunes are tied to video games that can have relatively short lives before players move on to the next craze.

ADVERTISEMENT

Right now, Epic Games’ “Fortnite” is a hot fad that has been siphoning attention — and potential sales — from the titles made by other companies.

Although Activision also still owns popular games such as “Call of Duty” and “Candy Crush,” it expects its revenue this year to fall by about 20 percent to $6.03 billion.

FEATURED STORIES

Activision will cope trimming 8 percent from its workforce of nearly 10,000 people and assigning more of its remaining employees to work on “Call of Duty,” ”Candy Crush,” and several other of its most popular titles.

The Santa Monica, California, company had already reshuffled its leadership, even though its profits rose last year by more than five-fold to $1.8 billion. Revenue climbed 7 percent to $7.5 billion, the highest since Activision’s inception 40 years ago.

But CEO Bobby Kotick said the performance fell shy of the company’s expectations, prompting a re-evaluation of its priorities and a pruning of its workforce.

This year “will require significant change to enable us to achieve our long-term goals and objectives,” Kotick told analysts during a Tuesday conference call. “We’re making changes to enable our development teams to create better content for our biggest franchises more quickly.”

Severance pay and other costs incurred in the layoffs will result in accounting charges of about $150 million.

Even as jettisons workers as some of its revenue evaporates, Activision said it will also boost its stockholder dividend by 9 percent from last year to 37 cents per share.

Activision’s stock rose $1.33, or 3 percent, to $43 in extended trading after the layoffs were announced. NVG

ADVERTISEMENT

RELATED STORIES:

‘Call of Duty’ maker Activision Blizzard plans to lay off hundreds of employees — reports

‘Call of Duty: Black Ops 4’, ‘FIFA 19’ top PlayStation Store downloads for 2018

Read Next
LATEST STORIES
MOST READ
Don't miss out on the latest news and information.
View comments

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Activision Blizzard, Gaming, layoffs, video games
For feedback, complaints, or inquiries, contact us.


© Copyright 1997-2019 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.