Blizzard laid off 775 people even though they reported record results in 2018. I had an argument with someone who claimed that that is crazy and Blizzard is going down, but I didn't have enough arguments that it's not that unusual. Help me out?
I’ve seen a lot of talk about this lately. The first thing I want to say is that it’s a terrible situation for everyone involved. [My inbox is always open for anyone who has lost a job and needs some assistance]. I can help with design reviews, code reviews, resume reviews, cover letter reviews, or general coping with job loss advice if you need it. I’ve been through it myself (including an Activision-Blizzard layoff in the past), so I know where you’re coming from. I will help however I can.
For the rest of you, here’s a quick summary of the events that transpired and why.
Activision-Blizzard (stock symbol: ATVI) is a company that is comprised of three major parts - Activision (Call of Duty, Crash Bandicoot), Blizzard (Overwatch, Hearthstone), and King (Candy Crush). ATVI released their year-end earnings report for fiscal 2018 and provided guidance/predictions for fiscal 2019. In the earnings report was both good news and bad news.
The good news was that 2018 was a banner year. Thanks to successful releases on multiple platforms, ATVI was able to break their records and beat their previous projections. They made more than they predicted. It was a really good year. Investors are going to get paid a larger dividend and ATVI is going to buy back $1.5 billion worth of stock.
The bad news is that 2019 is projected to be significantly weaker than 2018 (2019 is projected to be ~13% below 2018). This translates to a prediction of earning around $100 million less in 2019 than 2018. This is primarily due to the fact that Blizzard does not have a major release in the works planned for 2019 like they had in 2018 with Battle for Azeroth. No big release from Blizzard in 2019 means significantly less money earned in 2019.
ATVI is taking steps to mitigate this predicted shortfall pre-emptively by cutting their costs. This always means layoffs. Tech companies don’t have a lot of costs other than what it takes to pay and supply people to do work for them. We can’t make our manufacturing much cheaper. ATVI has primarily and specifically targeted non-development positions for layoffs, with the heaviest of them focused on Blizzard but also cutting from the Activision and King divisions. Non-development in this context means jobs like esports coordinator, community manager, customer service rep, and so on. ATVI said their plan going forward is focusing more money into development and less into other stuff like esports, presumably because these endeavors haven’t really paid off for them and are not looking better in 2019.
Look, the whole situation sucks. I don’t think anybody is going to say it doesn’t. My heart goes out to all those people who lost their jobs and I hope they all find something soon. I hope their severance packages are generous. I hope I can help some of them in any way that I can. I hope this explanation clears some things up about the situation. I’ve seen quite a few “hot takes” over the past 18 hours that skip over a lot of the context of this situation. It’s not as cut and dry as the “evil executive laughs while ruining peoples’ lives”, but the truth rarely is.
PS. Please do not bring up Satoru Iwata. Japan has a completely different working culture, including tremendous social pressure to work yourself to the point of failing health and/or death. Yes, their employees get significantly more job security. There are also so many Japanese devs that have failing health because of this work culture. They pay for it in other ways.
The FANTa Project is currently on hiatus while I am crunching at work too busy.
[What is the FANTa project?] [Git the FANTa Project]
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