Source: MSN Money
Activision Blizzard Inc. plans to eliminate 8 percent of workers as part of a companywide reduction, an effort to get the maker of Call of Duty back on track after a disappointing forecast.
The layoffs would affect hundreds of workers at the company, which expects to record a roughly $150 million expense in connection with the belt tightening. Bloomberg reported last week that the video-game maker was preparing to make the cuts.
The announcement extends a tumultuous stretch for the video-game industry. Electronic Arts Inc. and Take-Two Interactive Software Inc. both saw their stocks plunge last week after they released earnings. Companies are having to work harder to keep gamers hooked, especially as they compete with Epic Games Inc.’s watershed title Fortnite.
A series of executive departures have added to the turmoil for Activision. Eric Hirshberg, the chief executive officer of Activision Publishing, and Mike Morhaime, the longtime head of Blizzard, both announced plans to step down. And on New Year’s Eve, Activision said it was firing Chief Financial Officer Spencer Neumann — shortly before he took the same position at Netflix Inc. Tim Kilpin, a toy-industry veteran recruited to lead Activision’s consumer-products division two years ago, retired this month.
CEO Bobby Kotick said on Tuesday that the company had fallen short of its “full potential.”
“These changes should enable us to achieve the many opportunities our industry affords us,” he said in a statement.
Activision, the largest independent U.S. video-game publisher, reported revenue of $2.84 billion last quarter. That missed the $3 billion projection by analysts. It expects revenue of $1.18 billion in the current period, short of the $1.48 billion consensus.
The outlook initially sent the stock down as much as 5 percent in late trading, but the shares rebounded as Activision laid out its comeback plan. They were up 2.7 percent as 5:08 p.m. in New York.
The company said in November that key games such as Overwatch and Hearthstone had suffered a slowdown. Activision also severed ties with game maker Bungie after disappointing sales of the Destiny franchise.