Blizzard Entertainment, one of the biggest names in the video game business, has begun a significant round of layoffs, Kotaku reports. The move seems to confirm earlier new reports from Bloomberg.
Blizzard is responsible for flagship gaming franchises including "World of Warcraft," "Overwatch," "Hearthstone," and "Diablo." A spokesperson for the company did not immediately respond to a request for comment.
In a memo to staff obtained by Kotaku, Blizzard leadership promised an "comprehensive severance package" to affected employees. Kotaku reports that the job cuts could affect as many as hundreds of employees.
On Tuesday, Blizzard parent company Activision Blizzard is expected to report its earnings for the December quarter. The holiday quarter is traditionally the biggest of the year for the video game business, but Wall Street is projecting the company to show slowing revenue. Activision Blizzard stock has seen its value cut in half in recent months.
A person close to the company previously told Kotaku's Jason Schrier that the layoffs are expected to hit Blizzard's esports and publishing divisions especially hard. Blizzard, has spent the last several years supporting professional competition for its most popular games, including "Overwatch," "Hearthstone," and "Starcraft."
Notably, it seems that Blizzard esports head Amy Morhaime left the company in December, according to her LinkedIn. That came just months after Blizzard cofounder Mike Morhaime, her husband, announced that he would step down as president of the company. Morhaime is staying on as a strategic advisor to Blizzard through April.
Beyond Amy Morhaime and Mike Morhaime, Activision Blizzard has lost other key executives, including CFO Spencer Neumann. More recently, Activision Blizzard lost the rights to flagship online shooter "Destiny 2," as developer Bungie opted to split off and self-publish the title.
Activision Blizzard cited underwhelming sales for the "Destiny 2: Forsaken" expansion as one of the reasons the company underperformed during the third quarter of 2018. In that quarter, the video game publisher reported a 5% decline in earnings over the same period of 2017, and revenue over the same quarter declined by 6.6% to $1.151 billion.
Blizzard has reportedly been working to cut costs since early last year. Employees at Blizzard told Kotaku that they were repeatedly told to reduce spending by former CFO Amrita Ahuja, who left in January 2019. In December, Eurogamer reported that Blizzard negotiated buyouts for more than 100 customer service employees based in Ireland.
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