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Activision Blizzard says job cuts could have possible negative impact on financial performance

Activision Blizzard says job cuts could have possible negative impact on financial performance

Publishing giant Activision Blizzard has said that there is the potential for the eight per cent workforce cull that it announced last month to have a negative impact on its business.

In its annual report 10-K filing with the United States Securities and Exchange Commission, published on February 28th, Activision Blizzard is compelled to warn investors of any risk factors that may impact its financial performance.

Much of this section is devoted to fairly typical concerns it has reported before, including the company not being able to deliver popular games consistently, its dependence on a small number of franchises, managing its own growth and the potential for legal proceedings.

This time, however, Activision Blizzard has said one potential risk factor is that it might not be able to "realise the expected financial and operational benefits" of the job cuts it announced alongside its most recent financial results. Furthermore, the publisher has said that the cuts could actually "negatively impact" its business.

Activision Blizzard also says that the cuts could be costly, lead to other employees leaving and have a negative impact on the productivity and morale of staff. The firm has already set aside $150m to compensate workers whose roles have been axed. 

"In February 2019, we announced a restructuring plan under which we plan to refocus our resources on our largest opportunities and to remove unnecessary levels of complexity and duplication from certain parts of our business," Activision Blizzard wrote.

"While we believe this restructuring plan will enable us to provide better opportunities for talent, and greater expertise and scale on behalf of our business units, our ability to achieve the desired and anticipated benefits from the restructuring plan within our desired and expected timeframe is subject to many estimates and assumptions, and the actual savings and timing for those savings may vary materially based on factors such as local labour regulations, negotiations with third parties, and operational requirements. These estimates and assumptions are also subject to significant economic, competitive and other uncertainties, some of which are beyond our control.

"Further, there can be no assurance that our business will be more efficient or effective than prior to implementation of the plan, or that additional restructuring plans will not be required or implemented in the future. The implementation of this restructuring plan may also be costly and disruptive to our business or have other negative consequences, such as attrition beyond our planned reduction in workforce or negative impacts on employee morale and productivity, or on our ability to attract and retain highly skilled employees. Any of these consequences could negatively impact our business."

Activision Blizzard CEO Robert Kotick announced that it was shedding eight per cent of the company's workforce after talking about the publishing giant's "record revenue" for the year.

Per this SEC filing, the company has in the region of 9,900 full and part-time employees, placing the total number of job cuts at around 800. Only 140 of the company's staff are subject to fixed-term employment contracts.

The mass layoffs at Activision Blizzard have led would-be union Game Workers Unite to call for Kotick's resignation. Kotick appeared alongside Electronic Arts boss Andrew Wilson in a list of the Top 100 Most Overpaid CEOs, too.  

PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for, VGC, Games London, The Observer/Guardian and Esquire UK.