Updated: Activision/Blizzard Reportedly Announcing Layoffs of Hundreds Tomorrow

Update 2/12/19: Activision/Blizzard has laid off 8% of it's workforce, almost 800 people. The bulk of the eliminations took place at Blizzard, but also included Activision proper and King. Many of the layoffs were in non-developer departments such as publishing and eSports (which is very surprising given it's growth).

During an investor call today, Activision Blizzard CEO Bobby Kotick informed the group that the company had a record year, once again, in spite of missed expectations.

With the growth of video games and a market that continues to become more saturated by the day, the AAA companies are reacting.

According to a report on Bloomberg, Activision/Blizzard plans to announce job cuts tomorrow, which could see hundreds laid off. The source states that the cuts are due to a restructuring plan for "centralizing functions and boost[ing] profits." When the story broke, this caused another slight drop in the company's stocks on Friday by roughly 2.5%.

All this is occurring while the new CFO of Blizzard, Dennis Durkin, received $15 million in awards for taking the job in January.

As mentioned last week, larger gaming developers and publishers are seeing their profit margins dwindling due to the increased competition in the market. Aka, there are a lot of games available to play and little time to play them all. Fortnite being one of those products, but not the only one. Companies like Activision and EA have dropped their projected sales for 2019. It might be a blip on the radar to these companies but it's still a loss of profit. A $100 million loss for EA is not something one can easily dismiss. Finding ways to cut costs would be the likely, and most immediate reaction a business would have to this news. It's the unfortunate reality. For Activision/Blizzard they feel that reducing their workforce will help accommodate the loss.

Activision/Blizzard is one of the few companies that tries to assist their employees by offering severance packages and incentives to leave early; those who are laid off will likely receive some compensation. Though not knowing if it's going to be your job or your co-worker is enough stress to last a lifetime. No severance is enough for someone who's been laid off.

As Activion's influences continued to grow, Blizzard used 2018 to steadily cut costs. Blizzard ending Heroes of the Storm eSports in December may be due, in part, to their restructuring plan.

Activision/Blizzard is expected to have a busy 2019. The Overwatch League second season is about to begin. Diablo: Immortal will release on mobile phones soon (hard-core fans, you can chill out - people have gone mobile years ago and it could produce a lot of sales for Blizzard). Sekiro: Shadows Die Twice releases next month and has been generating a fair amount of positive buzz from gaming sites. The success of the Crash Bandicoot reboot has the company looking forward to solid sales with Crash Team Racing. Blizzard itself may not have a new IP to announce, but there is potential for expansions with World of Warcraft and Hearthstone, a new PC/console Diablo game, new heroes and maps with Overwatch - there is a lot to keep them active in the coming months.

It's unfortunate that this is how businesses work. Investment should be made in employees and not a select few at the top. If Activision/Blizzard does follow through with layoffs, best of luck to those seeking new work.