Activision Blizzard Faces Layoffs Amidst Financial Success

Activision Blizzard recently laid off approximately 50 employees in its Blizzard esports department, according to a report from The Verge. This news comes on the same day that the company released its Fiscal Year 2023 Q2 results, revealing a financially successful quarter despite concerns about the future of its esports endeavors.

Financial Success Despite Layoffs

In the second quarter, Activision Blizzard experienced a 50% year-over-year growth in net bookings, with revenue increasing from $1.64 billion to $2.46 billion. This growth can largely be attributed to the lucrative launch of Diablo IV, increased revenue from various franchises, and mobile expansion. However, amidst this success, the company made the decision to lay off 50 employees from Blizzard’s esports department.

Employees Shocked and Disappointed

The laid-off employees expressed their surprise and disappointment, stating that they were given no warning or opportunity to transition to other roles or teams within the company. According to The Verge, one individual described the layoffs as a “significant gutting of Activision Blizzard esports.”

Potential Shakeup in Esports Efforts

These layoffs may be a precursor to a larger shakeup in Activision Blizzard’s esports efforts. A crucial vote by esports team owners later this year will determine the future of the company’s esports initiatives. The official financial results highlighted the pending vote, stating that if the teams decide not to continue under an updated operating agreement, a termination fee of $6 million will be payable to each team. The outcome of this vote remains uncertain, but it could potentially reshape Activision Blizzard’s esports programs moving forward.

Company’s Commitment to Esports

Activision Blizzard remains committed to the future of esports, as expressed by Brad Crawford, the senior director of global communications. He assured that the company regularly evaluates its staffing structure to align with evolving trends and ensure optimal support for teams, players, and fans. Supporting employees during times of transition is a top priority for the company.

Ongoing Merger and Regulatory Challenges

A day before the layoffs, Activision Blizzard and Microsoft agreed to extend their merger deadline. The merger aims to make Activision Blizzard a part of Xbox’s first-party output. However, the U.K.’s regulatory agency, the Competition and Markets Authority, previously blocked the acquisition in April. The companies now have until October 18, 2023, to address the regulatory concerns and finalize the merger.

Conclusion

While Activision Blizzard celebrates its financial success, the recent layoffs raise concerns about the future of its esports division. The forthcoming vote by team owners will determine the direction of these efforts. In the meantime, the company remains committed to esports and prioritizes supporting its employees during times of change.

[Source: The Verge]