Videogame publisher Activision Blizzard said it is laying off several hundred workers — about 8% of its total workforce of 9,600 — in a restructuring that will also boost the number of game developers by 20% during 2019.
Shares in the Santa Monica-based maker of Call of Duty gained 4% in after-hours trading following the news, which came as the company announced a mixed bag of quarterly and full-year results. Adjusted earnings per share of 90 cents in the fourth quarter fell short of Wall Street analysts’ forecasts, and “bookings” — a metric that includes deferred revenue from upcoming projects — reached $2.84 billion, short of forecasts for $3.04 billion.
The company had already signaled it planned cost cuts, but the scope of the roughly 800 departures was not known until this afternoon.
“While our financial results for 2018 were the best in our history, we didn’t realize our full potential,” CEO Bobby Kotick said. “To help us reach our full potential, we have made a number of important leadership changes. These changes should enable us to achieve the many opportunities our industry affords us, especially with our powerful owned franchises, our strong commercial capabilities, our direct digital connections to hundreds of millions of players, and our extraordinarily talented employees.”
Activision said it would focus its resources on its most popular games, with the number of developers working on Call of Duty, Candy Crush, Overwatch, Warcraft, Hearthstone and Diablo increasing by about 20% in 2019. The proceeds for those investments would derive from reduced spending on other games and lower company-wide costs. The company projects a charge of $150 million associated with the restructuring.
Despite its gains today, Activision shares are down 11% in 2019 to date and 40% over the past six months.